Washington (awp/afp) – The financial rating agency S&P on Friday lowered Ukraine’s long-term debt rating by three notches to CC, saying that the agreement recently granted by several Western countries to spread its payments amounts to “virtually certain” default.
“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 had explained that it expected “the conflict Russian-Ukrainian military continues”.
Russia invaded Ukraine on February 24.
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