S&P and Fitch downgraded Ukraine's long-term and short-term foreign currency ratings to SD (selective default) and RD (limited default), respectively. Eurobond issue ratings downgraded to D (default).
The agencies believe that the authorities allowed the default by agreeing with Eurobond holders to defer payments on the public debt for 24 months.
“As we understand it, the necessary majority of Ukraine's Eurobond holders... accepted the offer. We view this debt restructuring as problematic in accordance with our rating definitions,” S&P said in a statement.
S&P downgraded Ukraine's national currency rating from B-/B to CCC+/C, Fitch retained the corresponding rating at CCC-.
Ukraine's creditors have agreed to freeze the country's payments on Eurobonds until 2024. As Bloomberg reported, Ukraine's external debt is $19.6 billion. Kyiv reported that the decision would save almost $6 billion over two years.