Recently, the international rating agency S&P downgraded Ukraine's long-term sovereign and foreign currency issuer ratings from CCC to CC, leaving a negative forecast. According to the agency's scale, the rating has been downgraded to the category "issuer default has not yet occurred, but is almost inevitable". Danylo Hetmantsev, chairman of the Verkhovna Rada Committee on Finance, Taxation and Customs Policy, believes that "there is no real sensation here."

He explained that Ukraine is preparing to continue the restructuring of its commercial external debt, with negotiations to be completed by August 2024.

"According to the criteria of the rating agencies, restructuring operations (deferral of payments) fall under agreements on the exchange of bad debt, so the definition of default applies to them. Accordingly, in anticipation of the negotiations, the rating agencies will begin to downgrade Ukraine's sovereign credit rating and our foreign currency ratings to the last pre-default level, which was actually done by S&P first. In the near future, it will be followed by other agencies - Fitch, Moody's," Hetmantsev said.

On the eve of agreements or upon agreement, the ratings will be downgraded to selective/limited default. The situation was the same in 2022, when the first restructuring of the external commercial public debt was carried out, he recalled.

"After the legal completion of the exchange procedure and the entry into force of the new terms and conditions of the restructured issues, we can expect a certain increase in Ukraine's sovereign and foreign currency ratings. This is the basic scenario supported by the EFF program with the IMF. Under this scenario, in December, Ukraine successfully completed a debt restructuring, postponing the servicing and repayment of its external debt to the G7 countries and the Paris Club until March 2027. The restructuring of debt to external commercial creditors is also provided for under the umbrella of the EFF program," Hetmantsev added.

Therefore, according to him, it is likely to be achieved as well.

"However, it is still too early to talk about the terms of the restructuring, as it requires the consent of at least 75% of the holders of the relevant securities. Any speculation about the debt restructuring at this stage is pure speculation," the official emphasized.