S&P cuts Ukraine rating outlook to negative

Standard & Poor’s announced yesterday that it revised Ukraine’s sovereign credit rating outlook from stable to negative. The agency cited external and fiscal funding challenges, compounded by increasing refinancing risks due to uncertainty regarding the outcomes of negotiations with the IMF and Gazprom. At the same time, S&P affirmed Ukraine’s ‘B+/B’ long and short-term foreign and local currency sovereign ratings.

Vitaliy Vavryshchuk: S&P’s argumentation for the outlook downgrade reflects concern regarding Ukraine’s fiscal policies and growth in the external financing gap. The reasoning does not reveal any new additional details on the issue and the new is fully priced in by the market, in our view.