Moody's affirms Ukraine's sovereign rating

Moody’s Investors Service said yesterday that last week’s default by Ukrzaliznytsya, Ukraine’s state-owned railway operator, was in line with the sovereign credit rating of ‘B2.’ Moody’s said there was no sovereign guarantee on the Ukrzaliznytsya loan and no cross-default clauses that would trigger a sovereign default. At the same time Moody’s noted that Ukrzaliznytsya is current on a Deutsche Bank loan and that the Ukrainian government has no major debt payments until March 2010. Ukrzaliznytsya failed to make a scheduled payment on November 11 on a syndicated loan from Barclay’s; it took out the USD 550 mln loan in summer 2007.