Fitch downgrades Ukraine further into default zone
FITCH downgraded Ukraine鈥檚 credit rating further into default territory at 鈥淐鈥 from 鈥淐C鈥 on Wednesday, citing a recently concluded in-principle agreement with a group of creditors to restructure $20 billion of international bonds.
A 鈥淐鈥 rating indicates Fitch鈥檚 view that a default or default-like process for Ukraine has begun.
On Monday, Ukraine said it had reached an agreement in principle with a group of creditors to restructure $20 billion of international bonds, bringing the war-torn country closer to an unprecedented debt rework.
The proposal provided a 37% nominal haircut on Ukraine鈥檚 outstanding international bonds, saving Kyiv $11.4 billion in payments over the next three years.
鈥淭he reported agreement with external commercial creditors constitutes a distressed debt exchange (DDE) under its sovereign rating criteria,鈥 Fitch said, adding that it involves a material reduction in terms and extension of maturities.
Ukraine鈥檚 finances are precarious as its 28-month war with Russia drags on. Russia鈥檚 2022 invasion decimated its economy, leaving it heavily reliant on money 鈥 and military aid 鈥 from international partners. 鈥 Reuters
