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pay UAH7.0bn in dividends to the state, while its subsidiaries (mostly state enterprises) will pay UAH15.28bn dividends in 2019. Based on its 2019 budget law, the state is planning to receive UAH44.54bn in total dividends. Last year, it received UAH39.7bn in dividends, which was higher than plan (UAH36.3bn) and the key contributor to that amount was Naftogaz (UAH29.5bn).
8.4 International ratings
Ukraine - Rating agency
as of Jan 2018
Bond rating: Moodys
Caa2 (P)
Bond rating: Fitch
B- (S)
Bond rating: S&P
B- (S)
International ratings agency S&P Global Ratings affirmed its 'B-/B' long- and short-term foreign and local currency sovereign credit ratings on Ukraine with stable outlook, Interfax Ukraine reported on April 15.
"While the economy is growing and inflation is on a downward path, the financing outlook is uncertain for government foreign currency redemptions beyond 2019, when Ukraine will have to negotiate a fresh agreement with the International Monetary Fund (IMF)," S&P said.
Ukraine faces sizable external debt repayments against the backdrop of presidential and parliamentary elections in 2019, but as bne IntelliNews reported in “Ukraine’s bond market revolution about to begin, just as debt payments soar,” the Ministry of Finance seems ready to cover its obligations.
The stable outlook reflects S&P’s expectation that Ukraine will broadly comply with the terms of the $3.9 billion IMF stand-by arrangement, potentially with some delays. The other danger to Ukraine’s ratings is a fight with Russia over the disputed $3bn bond Russia bought at the end of ousted president Viktor Yanukovych’s government.
"An adverse final ruling in Ukraine's legal battle with Russia over a Eurobond issued in December 2013, and held by Russia, could have implications for Ukraine, in our opinion. Such a ruling could be some years away. However in a worst-case scenario, it might create technical constraints for Ukraine's ability to repay its commercial debt held by other creditors, which would pressure the ratings. We note that the government believes there is no potential for technical constraints on debt service, even in the case of an adverse ruling in the future," S&P said.
"We could consider a positive rating action if we see improvements in growth, fiscal and external imbalances beyond our expectations, and if we conclude that the security situation in the non-government-controlled areas in the East of the country has stabilized and further escalation is unlikely," S&P said.
Moody's Investors Service warned that Ukraine’s credit profile would be badly damaged if the country’s biggest lender Privatbank is returned to its former owners, the ratings agency said in a press release on April 25. A Kyiv court ruled on April 18 that the nationalisation of PrivatBank in 2016 was illegal paving the way for the bank’s return to its former owner oligarch Ihor Kolomoisky.
53 UKRAINE Country Report May 2019 www.intellinews.com