Short-term foreign currency rating was raised from “D” to “C” (an exceptionally high level of credit risk).
The report noted that the country has emerged from a state of default on commercial foreign debt by issuing new bonds Eurobonds November 12 for holders of securities of $ 15 billion. As a result of the restructuring of debt maturities have been shifted to the 2019-2027 years, the amount of debt has been reduced by $ 3 billion (3 4% of GDP).
The agency’s analysts believe the rapid economic recovery in Ukraine unlikely. They forecast a decline in GDP in Ukraine in 2015 at 11.6%. Fitch expects growth of the Ukrainian economy in 2016 by 1% in 2017 may increase growth to 2-3%.
The report notes that growth prospects continue to constrain the same factors that led to the deep recession of the Ukrainian economy in 2014 and 2015. Exporters are faced with the loss of the Russian market – its share in the export of Ukraine decreased from 24% in 2013 to 12%. Military conflict in the east of the country has damaged production facilities and supply chains. Investor confidence will affect the geopolitical risks. At the same time, Fitch expects that the conflict in the east of Ukraine does not increase.
The agency’s analysts believe that the failure to pay Russia $ 3 billion will not constitute a default on the criteria Fitch.
“Fitch also assumes that any legal action as a result of non-payment of this debt will not prevent the maintenance of new external debt”, – said in a statement.
October 6, Fitch downgraded the long-term and short-term issuer default ratings (IDR) of Ukraine in foreign currency from “C” to “RD” (restricted default)