Moody’s downgraded Ukraine’s rating, but the future forecast is stable.

Moody’s Investors Service lowered Ukraine’s rating from Caa3 to Ca but changed the forecast from negative to stable. The rating was reduced after assessing the risks caused by the war’s consequences. Among the main concerns, the agency’s experts point to a reduction in the sustainability of the country’s public debt and an increase in the likelihood of debt restructuring with losses for private sector creditors. At the same time, a rating downgrade is possible if the war intensifies and the damage caused to Ukraine’s economy increases. The critical factor in downgrading Ukraine’s ratings to Ca is the growing risks of public debt sustainability against the background of the war and its consequences for the economy and the financial sector.