Fitch Downgrades Ukrainian City of Kyiv’s Foreign-Currency IDR to ‘D’

Fitch Ratings-Moscow-11 November 2015: Fitch Ratings has downgraded the Ukrainian City of Kyiv’s Long-term foreign currency Issuer Default Rating (IDR) to ‘D’ (Default) from ‘C’.
The downgrade of Kyiv’s Long-term foreign currency IDR follows missed payment on the city’s USD250m eurobond and the subsequent activation of the cross default clause on the USD300m eurobond. The city introduced an interim moratorium on any payments to its eurobond holders on 6 November 2015. According to the original schedule Kyiv’s USD250m eurobond final maturity date was 6 November 2015 and its USD300m eurobond 11 July 2016.
Fitch treats the introduction of the interim payment moratorium on the city’s eurobonds as defaults in accordance with its distressed debt exchange (DDE) criteria, leading to today’s downgrade of the city’s Long-term and Short-term foreign currency IDRs to ‘D’ from ‘C’.
The introduced payment moratorium will be valid until the eurobonds’ conditions are amended and the exchange offer accepted. The right for the city to suspend the repayment of its eurobonds was granted by Ukraine’s parliament in May 2015. The city was mandated to extend the maturity of its external debt as part of a broader exercise to support Ukraine’s public sector finances and external liquidity following the introduction of the IMF’s Extended Fund Facility for Ukraine in March 2015.
Additionally, the City of Kyiv extended the maturities of its domestic bonds, which led to the recent downgrade of its Long-term local currency IDR (see ‘Fitch Downgrades Ukraine’s City of Kyiv Local-Currency IDR to ‘RD” dated 8 October 2015 at www.fitchratings.com). Prior to that Ukraine had missed the payment on its eurobond, which led to a recent sovereign downgrade (see ‘Fitch Downgrades Ukraine’s Foreign-Currency IDRs to ‘Restricted Default” dated 6 October 2015 at www.fitchratings.com).
As the city’s all four outstanding bond obligations are in default, the Long-term local currency IDR has also been downgraded to ‘D’ from ‘RD’. Simultaneously Fitch has withdrawn the City of Kyiv’s Short-term foreign currency IDR as it is no longer considered by Fitch to be relevant to the agency’s coverage because the city is no longer issuing short-term external debt.
https://www.fitchratings.com/site/fitch-home/pressrelease?id=993830

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