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Ukraine’s long term foreign currency debt. All three agencies say Ukraine’s outlook is ‘stable.’
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
Ukraine’s Finance Ministry raised UAH1.3bn at its weekly bond auction on June 30​ after ​raising UAH6.2bn at the auction the week​ ​before. The auction receipts came from the placement of 3M, 6M, 2Y and 3Y bonds.
Around 40% of auction receipts – UAH534mn – came from the sale of 3M bonds to three bidders at 7.24% (the same rate for these bonds as a week ago). In addition, two bidders bought 6M bonds for UAH485mn at 7.74% (vs. 7.71% for these bonds last week).
MinFin satisfied five out of six bids for 2Y bonds for UAH247mn with a weighted average interest rate of 10.39% (the same rate as a week ago). On top of that, one bidder bought 3Y bonds for UAH5mn at 10.47% (the same rate as a week ago).
Two bidders were ready to buy 1Y bonds at 10%, but MinFin didn’t satisfy these bids. Recall, last week 1Y bonds were placed at 9.7%.
“The results of the latest local bond auction are sobering. They demonstrate that the capacity of the local bond market is low, and market participants are not ready to accept lower yields on UAH-denominated debt. This situation also means that the government will have to resort to external borrowing and the placement of local Eurobonds for financing the budget deficit,” Evgeniya Akhtyrko of Concorde Capital said in a note. “The higher cost of local debt also questions the feasibility of current government intentions to flood Ukraine’s economy with affordable loans in order to stimulate economic growth.”
60​ UKRAINE Country Report​ July 2020 ​ ​www.intellinews.com