Fitch downgrades Ukraine credit to B-

Fitch Ratings lowered its long-term sovereign credit rating on Ukraine to B- from B, the agency reported on November 8. The ratings of all Ukrainian sovereign Eurobond issues were lowered to B- as well. Fitch affirmed Ukraine’s short-term rating in foreign currency at B. The agency kept its outlook negative for all ratings.

The reasons for the downgrade listed by Fitch are Ukraine’s weakening possibility to attract external loans to refinance future debt redemptions, as well as low and declining international reserves, a trend that poses risks for the national currency.

Alexander Paraschiy: Fitch is the third agency that downgraded Ukraine over the last seven weeks, and its revision mirrors S&P’s downgrade announced just a week before. Therefore, this rating action was broadly expected and it’s unlikely to generate any noticeable market reaction. Naturally, we expect the agency will downgrade the ratings of all the covered corporate Ukrainian Eurobond issuers this week.