Naftogaz downgraded, Eurobond trading halted

Fitch Ratings announced yesterday that it dropped the long-term foreign and local currency Issuer Default Ratings on Naftogaz of Ukraine from ‘CC’ to ‘C’; both ratings remain on rating watch negative. Fitch also downgraded Naftogaz’ USD 500 mln Eurobond’s senior unsecured rating from ‘CC’ to ‘C’ and removed it from rating watch negative. Fitch said the move reflects recent statements by Naftogaz and the Ukrainian government about restructuring the bonds; Fitch said it now believes Naftogaz is unlikely to repay the Eurobonds on their maturity date – September 30, 2009. At the same time, the Luxembourg Stock Exchange announced this morning that it has suspended trading in Naftogaz’ Eurobond as of today because of the “non-respect for stock exchange regulations” until further notice.