Moody's downgrades Ukraine's sovereign ratings to Ca; outlook remains negative
Moody's - Mar 25, 2015
Moody's Investors Service has today downgraded Ukraine's long-term issuer and government debt ratings to Ca from Caa3. The outlook remains negative.
The key driver of the downgrade is the likelihood of external private creditors incurring substantial losses as a result of the government's plan to restructure the majority of its outstanding Eurobonds. Also included in the restructuring is the external debt of state-guaranteed entities and selected other state-owned enterprises, and the Eurobonds issued by the capital city of Kiev.
The negative outlook reflects Moody's expectation that Ukraine's government and external debt levels will remain very high, in spite of the debt restructuring and plans to introduce reforms.
In a related rating action, Moody's also downgraded the issuer and debt ratings of the "Financing of Infrastructural Projects" (Fininpro) to Ca/(P)Ca from Caa3/(P)Caa3 and maintained the negative outlook. Fininpro's debt is fully and unconditionally guaranteed by the government of Ukraine.
Moody's also lowered Ukraine's country ceiling for long-term foreign currency debt to Caa3 from Caa2, and its country ceiling for long-term domestic currency debt and deposits to Caa2 from Caa1. Ukraine's country ceiling for foreign-currency bank deposits remains unchanged at Ca. All short-term country ceilings also remain unchanged at Not Prime (NP).
