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Moody’s has ​Ukraine’s rating one notch lower​ than its peers (B3) with a Stable outlook.
Fitch Ratings has affirmed its long-term foreign currency rating of Ukraine at B with a Stable outlook, ​the agency reported on September 4. Fitch assesses Ukraine’s macroeconomic policy as credible, with low inflation and a narrowed fiscal deficit prior to the coronavirus shock. At the same time, Fitch assesses Ukraine’s external liquidity as low and governance as weak.
It sees Ukraine’s gross international reserves at 4.5 months of external payments, budget deficit at 6.5% of GDP, and state debt (without guaranteed debt) at 57% of GDP in 2020, which are better than median for B-rated nations (4.1x, 7.3% and 65%, respectively). It expects that Ukraine’s budget deficit will decline to 5.4% of GDP in 2021 and 4.2% in 2022, while state debt (excluding guarantees) will stabilize at 60% of GDP in 2022-2023 and will decline afterwards. It sees Ukraine’s real GDP will recover to 3.8% growth in 2021 and 3.5% in 2022, after a 6.5% decline this year.
Among the factors that could improve Ukraine’s rating, Fitch sees faster budget consolidation after the crisis, a sustained increase in gross international reserves and progress in reforms to improve governance standards. Among possible triggers for negative rating actions, Fitch sees extended delays in the IMF program due to reform reversals, worsened public finances and geopolitical shocks.
Fitch’s rating for Ukraine is in line with that of ​S&P (B / Stable)​ and one notch above that of ​Moody’s (B3 / Stable)​.
Moody’s rates Ukraine at Caa1​ with stable outlook on its foreign currency debt. The local debt is also rated at Caa1.
Moody’s last upgraded Ukraine from Caa2 (Positive) in August 2017 as the country emerged from an economic meltdown that year. The lowest rating the country had was Ca (Negative) in March 2015 in the wake of the Euromaidan protests that ousted president Viktor Yanukovych. The highest the country has scored was B1 (positive) in August 2008 as the entire region boomed before the global financial crisis struck that autumn.
Standard & Poor’s (S&P) rates both Ukraine’s foreign and local debt at B-
with stable outlook.
S&P last upgraded Ukraine’s rating from Caa2 (positive) in August 2017. The rating nadir was Ca (negative) awarded in March 2015 following the Maidan events. Its zenith was B1 (positive) awarded in August 2008 at the apex of the region-wide boom.
Fitch Ratings affirmed on September 18 the long-term issuer default rating of Ukrainian sunflower oil producer and grain trader​ ​Kernel​ at BB- with a Stable outlook. ​The rating’s affirmation reflected the agency’s view about Kernel’s high share of export revenues and expectation that the company will continue to refinance its upcoming debt maturities.​ ​Also, the agency estimates Kernel’s EBITDA has reached $412mn in FY2020 (up 19% y/y), supported by a record-high sunflower seed harvest in the last season and higher average sunflower oil prices. And the agency expects that the high EBITDA will allow Kernel to avoid a temporary leverage hike in FY2020 and smooth out the impact of spending on its leverage by FY2021. The agency projects positive FCF after FY2022 due to CapEx reduction and boosted profits, supported by new facilities’ operations.
60​ UKRAINE Country Report​ October 2020 ​ ​www.intellinews.com