Page 57 - UKRRptDec19

Ukraine's large external debt repayments, as well as provide an anchor against backsliding on the reform agenda, Moody’s remarked.
Conversely, (1) a failure to agree upon a new IMF program or to remain in broad compliance with a new agreement, (2) further escalation of geopolitical tensions with a negative effect on Ukraine's economic and fiscal profile, or (3) Moody’s concluding that improvements to Ukraine's external vulnerability will not be sustained, will result in a downgrade in the agency’s outlook and possibly its rating of Ukraine, Moody’s said.
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.
Fitch rates Ukraine at B-​ on its foreign currency debt with no outlook indicated. The local debt is also rated at B- (none).
Fitch has become more cautious on Ukraine having removed its positive outlook call in December 2018. But the ratings have general recovered from Fitch “restricted default” rating in October 2015, following the Maidan events. The highest rating the country has had from Fitch was a BB- (positive) first awarded in May 2005 and again in October 2006, during a year-long investment frenzy when foreign banks bought up banks in the country believing the country was about to take off.
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.
8.5 ​Fixed income
Foreign investment in hryvnia denominated bonds hit the equivalent of $4bn, ​boosted by $43mn of purchases at the weekly auction in mid-November, reports the National Bank of Ukraine website. Since the start of the year, foreign investment in Ukraine’s government bonds has increased 16-fold, boosted in part by the May trading link with Clearstream. Foreigners now own 12.5% of Ukrainian internal government securities. If bonds in the portfolio of the National Bank are removed, the foreign participation in the market rises to about 40%.
At hryvnia auction in mid November,, demand for 3-year bonds was almost four times the supply, the equivalent of $100mn​. Compared to an auction three weeks ago, the cut-off price fell 200 basis points, to 13.12%. The bonds started the year with a yield of c.19%. Demand for 1-year and 6-month securities was close to the supply. Despite weak demand, yields fell 25 basis points for each security – to 13.75% for 1-year bonds; and to 14.1% for 6-month bonds.
57​ UKRAINE Country Report​ December 201 ​ ​www.intellinews.com