Fitch Ratings, an international credit rating agency, has downgraded the long-term foreign-currency Issuer Default Rating (IDR) of the Ukrainian Railways joint-stock company (Ukrzaliznytsia) from 'CCC' to 'C' following the downgrade of Ukraine’s sovereign credit rating from 'CCC' to 'C' as a consequence of the Ukrainian government’s announcement of a planned deal to defer payments on its Eurobonds.
Ukrzaliznytsia announced this in a statement, the CFTS portal reports.
Experts at Ukrzaliznytsia emphasized that the company continues to fulfill its financial obligations despite six months of the Russian military invasion of Ukraine and the fierce fighting in the country and that it made the latest coupon payments totaling about USD 36 million on its Eurobonds maturing in 2024 and 2026 in early July.
"Ukrzaliznytsia has thus fully fulfilled its financial obligations to the bondholders," the statement said.
According to the statement, the rating agency’s rating methodology provides for a clear linkage between Ukraine’s sovereign credit rating and that of a quasi-sovereign company like Ukrzaliznytsia.
"For its part, Ukrzaliznytsia, with the support of the Ministry of Infrastructure, has taken effective measures to balance its cash flow during the martial law, optimized its expenditures, and obtained additional instruments to support its liquidity, particularly access to EUR 50 million in financing from the EBRD," the company said.