REUTERS
Global ratings agency Fitch Ratings has lowered the long-term credit rating in foreign currency from "CCC" to "CC" of the largest Ukrainian state-owned banks Ukreximbank and Oschadbank (savings bank), according to an agency statement published on its Web site.
The downgrade reflects Fitch's view that defaults by both banks on their external debt obligations now appear probable. This follows the announcement by Ukraine's Ministry of Finance on 13 March 2015 on the sovereign's external debt restructuring, in which the Ministry indicated that the external debt of Ukreximbank and Oschadbank "will be included in the debt operations.”
Ukreximbank has two groups of outstanding bonds –$750 million maturing on April 27, 2015 and $600 million due on January 22, 2018. Oschadbank has $700 million eurobonds due on 10 March 2016 and $500 million due on 20 March 2018. The banks have yet to make public announcements about possible debt restructurings, if any, Fitch has reported.
Oschadbank has however paid coupons on its two Eurobonds during March 2015.
Currently there is no affirmation about the possible restructuring, however, its appearance would result in them being downgraded to "C" and then to the level of “RD” (restricted default) based on the outcome of restructuring negotiations.
"The banks' ratings could be maintained at their current levels, or moderately upgraded, if their debt is not restructured together with that of the sovereign," Fitch said.