Fitch and S&P downgraded Ukraine’s rating to limited default.

On August 12, rating agencies Fitch and S&P downgraded Ukraine’s credit ratings in connection with the postponement of state debt payments for two years. As UBN reported earlier, the repayment terms of all 13 series of sovereign Eurobonds have been extended by two years. Coupon payments due in the next two years are also deferred for this period. Due to this payment deferment, Ukraine will save almost $6B. However, from the rating agencies’ point of view, this is a default. Fitch stated that they consider the completion of the government debt management operation as an exchange of problematic debt and therefore lowered Ukraine’s rating to RD (restricted default) and all bond issues – to D (default). Previously, they were at pre-default level C. According to the S&P scale, Ukraine’s rating is now at the SD level  (selective default) and Eurobonds are at the Delevel.