Page 47 - UKRRptApr20

8.4 ​International ratings
Ukraine - Rating agency
as of May 1, 2018
last change
Moodys (USD rating)
Caa1 (S)
21/12/18
Fitch (USD rating)
B- (S)
22/7/16
S&P
B- (S)
25/9/15
Ukraine’s credit ratings have been improving but the country is still rated junk by the three main agencies.
The international rating agency S&P Global Ratings agency has affirmed its long-term foreign and local currency sovereign ratings on Ukraine at B and their Stable outlook, ​it reported on March 13.
The decision was a mild surprise to analysts who speculated that after the Ukraine is rapidly going into lockdown due to the coronavirus and is being buffeted by the collapse of oil prices and its failure to secure a new International Monetary Fund (IMF) deal it might have been downgraded.
By confirming the rating, the agency noted Ukraine’s high gross foreign reserves and declining state debt-to-GDP ratio, while pointing at risks related to the refinancing of external debt in the short term.
It also said the implications of the recent government reshuffle in Ukraine are uncertain for the country’s relationships with its key creditors.
But S&P said it may consider an upgrade of its rating in the next year “if the government makes progress on its reform agenda while preserving earlier achievements,” the key to, which is maintaining the central bank's independence.
As bne IntelliNews reported there were rumours of​ ​the management team at the National Bank of Ukraine (NBU) are about to be replaced​, which remain unconfirmed at the moment. The central bank has been the subject of ongoing attacks on both its current and former staff, including physical attacks on former NBU governor Valeriya Gontareva who was hospitalised by a hit and run driver and her house was burnt down in an arson attack last year.​ ​The NBU has branded attacks on its staff and Gontareva has a “terror” campaign and named oligarch Ihor Kolomoisky has being behind the attacks. Kolomoisky financed Ukrainian president Volodymyr Zelenskiy presidential campaign lent the support of his media empire, which played a crucial role in getting Zelenskiy elected.
The rating may be downgraded in case of “disruptions to funding from concessional programs or capital markets” become apparent, which “could happen if the government were to backtrack on key reforms." Analysts worry that if the team at the NBU are changed or if the government fails to secure a new IMF deal even if the NBU team are not changed then the country will struggle to meet some $5bn of debt coming due this year. A downgrade would only make an already difficult situation impossible.
S&P analysts forecast that Ukraine’s real GDP will slow down from 3.3% in 2019 to 2.5% in 2020, while it will grow by 3.2% in 2021 and 3.0% in 2022. They project the hryvnia at 24.5/$in 2020, on average, 25.4/$in 2021 and 26.0/$in 2022.
47​ UKRAINE Country Report​ April 2018 ​ ​www.intellinews.com