Moody’s Investors Service (Moody’s) has upgraded the government of Ukraine’s local and foreign currency issuer and senior unsecured ratings to Caa2 from Caa3, and changed the rating outlook to positive from stable. Consequently, Moody’s has upgraded to Caa2 from Caa3 the ratings of Ukraine’s nine senior unsecured eurobonds issued in the context of the government’s debt exchange operation in November 2015.
At the same time, Moody’s affirmed the Ca senior unsecured rating of the government’s USD3 billion bond sold to Russia in December 2013. The bond is currently in default. Moody’s also upgraded the backed long-term foreign-currency issuer rating of Financing of Infrastructural Projects (Fininpro) to Caa2 from Caa3, and changed the rating outlook to positive from stable. Fininpro’s debt is fully guaranteed by the Ukrainian government.
The upgrade of Ukraine’s government ratings to Caa2 from Caa3 is based on the following key drivers:
1. The cumulative impact of structural reforms that, if sustained, are expected to improve government debt dynamics;
2. The significant strengthening of Ukraine’s external position.
