Ukrzaliznytsia is approaching an inevitable default
The international rating agency Fitch downgraded the credit rating of the Ukrainian railway from CCC to C (default is inevitable).
The agency announced this in its official release, reports a PolitNavigator correspondent.
The reason for the change in rating was Ukrzaliznytsia’s appeal to creditors with a request to defer for 24 months the repayment of its Eurobonds, which had to be settled in 2024 (almost $600 million) and 2026 (300 million).
"Fitch is treating the petition as a distressed debt exchange (DDE) in accordance with its criteria, given that the proposed restructuring involves a significant reduction in terms and is being undertaken to avoid insolvency," the agency said.
They are convinced that the liquidity position of Ukrzaliznytsia is limited and insufficient to cover interest payments on LPN in US dollars due in January 2023 in the absence of further support from the state, which cannot provide the company with the funds necessary to make the payment.
Ukrzaliznytsia is approaching inevitable default.