Fitch upgrades Ukraine's rating to CCC after GDP warrant conversion
Fitch Ratings has upgraded Ukraine's long-term foreign currency rating to CCC from Restricted Default after the country agreed with creditors to swap its GDP warrants for standard debt securities. Fitch explained that the upgrade reflects the normalisation of Ukraine's relations with most external commercial creditors. It is reported by The Public with reference to Bloomberg.
The deal is about restructuring approximately $2.6bn of so-called GDP warrants, which have long been considered a risky instrument for the budget because of the linkage of payments to economic growth. According to Reuters, the deal was supported by 99 per cent of holders, allowing for conversion and reducing uncertainty for public finances.
Fitch also noted that the rating upgrade does not mean the disappearance of military and financial risks, but after the settlement of the warrants issue, the debt structure has become more manageable, which is important for further negotiations with creditors and a potential return to the capital markets.
