Moody's downgrades Ukraine’s rating to pre-default with negative outlook

The current rating of Ca is a step below the previous level of Caa3, Radio Liberty has reported.

At the same time, the agency said, the forecast remains negative.

The main factor for the decline is a substantial likelihood that foreign private lenders will incur significant losses due to Ukrainian government’s plans to restructure the majority of its outstanding Eurobonds.

Also included in the restructuring is the external debt of enterprises with government guarantees and other state-owned enterprises, as well as Eurobonds issued by the city of Kyiv, the report said.

The negative outlook reflects Moody's expectation that Ukraine's government and external debt levels will remain very high, despite the restructuring and plans to implement reforms, according to Moody's.

The agency has also downgraded other ratings of Ukraine.