The international agency Fitch Ratings lowered Ukraine's long-term default rating in foreign currency from CC (high probability of default) to C (default is imminent). This decision is due to the agreement between the Ukrainian government and the owners of Eurobonds on the terms of restructuring.
In its statement, Fitch noted that the deal provides for a significant reduction in principal and interest, as well as an extension of repayment terms. Such restructuring, according to the agency's forecasts, means that Ukraine will not be able to service its external commercial debt, including the 2026 Eurobond coupon, which is scheduled to be paid on August 1, until the deal with the bondholders is completed.
Today, Ukraine has $19.7 billion in outstanding bonds and owes $2.6 billion in GDP warrants, a fixed-income instrument whose payments are tied to the level of economic growth. Last week, the Verkhovna Rada supported the government's right to suspend payments on the national debt during the restructuring.
