(Washington) Financial ratings agency S&P on Friday downgraded Ukraine’s long-term debt rating by three notches to CC, saying the agreement recently granted by several Western countries to spread its payments amounts to a “virtually certain” defect.
Posted at 5:36 p.m.
“Ukraine has asked its foreign creditors to defer payments on all external debt for 24 months,” S&P said in a statement.
“Following this request, we believe that a default on sovereign debt in foreign currencies is a virtual certainty,” said the rating agency.
A group of Western creditors, including France, the United States, Germany, Japan and the United Kingdom, agreed on July 20 to a postponement of interest payments on Ukraine’s debt after a request from Kyiv, urging other Ukrainian bondholders to do the same.
The rating was given a negative outlook, reflecting “our view that Ukraine is likely to implement its debt restructuring plans, which we consider a default,” S&P added.
The agency had already downgraded Ukraine’s rating on May 27 to CCC+ and also had a negative outlook, due to “greater fallout from the Russian military attack”, and explained that it expected “the conflict Russian-Ukrainian military continues”.
Russia invaded Ukraine on February 24.