S&P downgraded Ukraine’s credit rating: which caused concern
According to the agency, the Cabinet of Ministers did not pay the coupon income for Eurobonds for 2026.
The American rating agency S&P Global lowered Ukraine’s credit rating to the level of “selective default” (SD). This happened due to non-payment of coupon income on Eurobonds. About this reported press office S&P Global agencies.
The agency noted that the government of Ukraine did not make the payment of coupon income for Eurobonds for 2026, which was supposed to take place on August 1, 2024. According to the notice, S&P Global does not expect to receive payment within the ten business days stipulated in the agreement.
“We downgraded our long-term and short-term foreign currency (FC) ratings of Ukraine to SD/SD (selective default) from CC. We also downgraded the 2026 Eurobond from CC to D (default)”, says the message.
For several months, Ukraine has been negotiating with creditors to restructure more than $20 billion in debt. The agreement was reached on July 22, a little less than two weeks before action was taken due to a possible default.
This agreement provides for a 37% discount on outstanding international bonds, which allows Ukraine to save $11.4 billion in payments over the next three years. In addition, it provides the government of Ukraine with additional time and financial resources to stabilize the economy and address the internal challenges caused by the protracted war.
Experts note that lowering the rating to the level of “selective default” can have significant consequences for the financial situation of Ukraine. This can affect the investment climate, cause an increase in the cost of borrowing and reduce the confidence of international investors in the country. However, debt restructuring and bond discounting could help Ukraine avoid full default and secure a more sustainable financial future.
