S&P downgrades Ukraine’s credit rating to “selective default” in response to the Eurobond restructuring.

The international rating agency S&P Global lowered Ukraine’s long-term and short-term credit ratings in foreign currency to the level of selective default – from CC/C to SD/SD – due to the missed Eurobond payment on August 1 amidst Ukraine’s $20B in debt restructuring.

The agency’s analysts do not expect any payments to be made during the bonds’ contractual grace period of 10 business days. Therefore, the 2026 sovereign Eurobond issue rating has also been downgraded to D (default) from CC, while the CC rating for the rest of Ukraine’s sovereign unsecured currency bond issues has been confirmed.

In his turn, the head of the Concorde Capital analytical department, Oleksandr Parashchiy, noted that the restructuring, which was recently agreed to by the Committee of Eurobond Owners of Ukraine, will help to achieve the goal of stabilizing Ukraine’s economy over the next three years.

“In the next 3.5 years, Ukraine will save about $12.2B on servicing and repaying the debt,” said Parashchiy. These funds can now be directed to critical expenses, including defense.