REUTERS
Fitch Ratings has announced on Tuesday it downgraded Ukraine’s long-term and short-term foreign currency IDR to 'RD' (Restricted Default) from 'C'.
"The 10-day grace period on Ukraine's $500 million Eurobond maturing on September 23, 2015, has elapsed without payment being made. Fitch therefore judges Ukraine to be in default on its sovereign eurobond obligations," reads the report.
Long-term local currency IDR and Country Ceiling are affirmed at 'CCC,’ according to the report.
On 24 September, Ukraine launched the exchange offer for approximately $18 billion in direct and government-guaranteed eurobonds. Fitch considers that this represents a Distressed Debt Exchange (DDE) under its criteria that results in material losses to bondholders and is being conducted to avoid default.
The rating agency noted that “Ukraine's ratings will be upgraded shortly after Fitch determines that the exchange has been successful. The new rating will be consistent with Ukraine's prospective credit profile and debt structure. The Ministry of Finance has said that it plans to conclude the exchange by October 27.”