Fitch upgrades Ukraine rating out of restricted default

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Ratings agency Fitch raised Ukraine’s credit score on Thursday after the war-torn secured a two-year reprieve on its foreign debt from creditors.

Fitch said the August 11 agreement gives Kyiv breathing room on almost $6 billion in principal and interest owed on Eurobonds, “alleviating external debt servicing pressure, in the context of weakening international reserves and acute war-related spending needs.”

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Fitch had placed Ukraine in restricted default last week while fellow ratings agency S&P Global downgraded the country to selective default status.

While Fitch upgraded Ukraine on Thursday from RD to CC, the rating means the risk of some kind of default appears probable.

“Despite this debt servicing relief, the ‘CC’ rating reflects unresolved debt sustainability risks resulting from Russia’s attack and Ukraine’s highly stressed public and external finances and macro-financial position,” Fitch said.

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