Page 56 - UKRRptDec19

8.4 ​International ratings
Ukraine - Rating agency
as of September 6, 2019
last change
Moodys (USD rating)
Caa1 (S)
21/12/18
Fitch (USD rating)
B (P)
06/09/16
S&P
B (S)
27/09/19
Moody's has upgraded its outlooks on the corporate family ratings of Ukraine's largest steelmaker​ ​Metinvest​ as well as Ukraine's largest poultry producer​ ​MHP​ to positive from stable, and affirmed its ratings at B3 The main rationale for the outlook upgrade of Metinvest's rating was the change of the agency’s outlook on Ukraine’s rating to Positive from Stable on November 22. Moody’s upgraded Metinvest’s rating to B3, one notch above Ukraine’s sovereign, on December 27, 2018. Metinvest’s two other long-term credit ratings are: from Fitch, BB-/Stable, two notches above Ukraine’s sovereign; and from S&P, B/Stable, one notch above Ukraine’s sovereign. Both ratings were raised on September 17.
Moody's Investors Service has improved the rating outlook, from ‘stable’ to ‘positive’ for seven Ukrainian banks:​ PrivatBank, Oschadbank, Ukreximbank, Raiffeisen Bank Aval, Prominvestbank, Sberbank, and Pivdenny Bank. Moody's also confirmed it basic credit rating of Ukrainian banks --Caa1. On PrivatBank, the subject of a takeover lawsuit by former owner Igor Kolmoisky, Moody's wrote of the bank, nationalized three years ago: “Improving PrivatBank's ratings is driven by an increase in Ukraine's sovereign rating, stabilization of the banking system, and improved asset quality and profitability of PrivatBank.”
Moody's Investors Service upgraded its Ukrainian government rating outlook to Positive from Stable​, keeping unchanged its Caa1 rating, the agency reported on November 22. The two drivers for the outlook improvement were: 1) the rebuilding of Ukraine's foreign exchange reserves, reducing external vulnerability in the context of large external repayments; and 2) the improvement of Ukraine's macroeconomic stability and the prospect for renewed reform momentum, strengthening the country's economic resilience, Moody’s said.
The reasons for keeping the rating unchanged were a) Ukraine’s significant external vulnerability, with large principal and interest payments on external government bonds due in the coming years; b) Ukraine's institutional capacity remaining hampered by very weak governance standards; and c) the risk of a flare up in geopolitical tensions continuing, the agency remarked.
Moody’s Positive rating outlook means the agency will decide, in the next 12-18 months and possibly within 12 months, whether or not it will upgrade its Ukraine rating. Such an upgrade will be possible if Ukraine makes progress with the issues Moody’s mentioned as the factors behind keeping the country’s rating unchanged at the time (external vulnerability, some steps along the reform agenda, evidence of reduced risks from the conflict in eastern Ukraine), the agency said.
Reaching an agreement with the IMF and remaining in broad compliance with the conditions of a new program will help to mitigate the risks posed by
56​ UKRAINE Country Report​ December 201 ​ ​www.intellinews.com