Finance
S&P lowers issue rating on Ukraine's GDP-linked debt to 'D' from 'CC'
Published by Global Banking & Finance Review®
Posted on June 3, 2025
2 min readLast updated: January 23, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on June 3, 2025
2 min readLast updated: January 23, 2026
S&P Global downgraded Ukraine's GDP-linked debt to 'D' after a missed payment, with the government seeking restructuring.
(Reuters) -S&P Global revised its issue rating on Ukraine's GDP-linked securities to "D" from "CC" on Tuesday, saying it missed the $665 million payment to holders of its GDP warrants due on June 2.
The Ukraine government said on Friday it would not make the payment, based on 2023 economic performance, but would continue to seek a restructuring of the instrument.
Ukraine created the instruments - fixed income securities indexed to economic growth - to sweeten its 2015 debt restructuring, but they had not been part of last year's broader restructuring due to their complex structure.
"We do not expect the payment within the securities' contractual grace period of 10 business days, given the government's moratorium on payments on this bond unless it is restructured," ratings agency S&P said.
In S&P's view, the Ukraine government's ability and medium-term incentives to meet its financial commitments in local currency (LC) are somewhat higher than those relating to foreign currency debt.
"A default on these LC obligations would amplify banking sector distress, increasing the likelihood that the government would have to provide the banks with financial support and limiting the benefits of debt relief," it added.
(Reporting by Nishara K.P in Bengaluru; Editing by Shounak Dasgupta)
S&P Global revised its issue rating on Ukraine's GDP-linked securities to 'D' from 'CC'.
The Ukraine government stated it would not make the payment based on 2023 economic performance and would continue to seek a restructuring of the instrument.
The contractual grace period for the payment on the GDP-linked securities is 10 business days.
A default on local currency obligations could amplify banking sector distress, increasing the likelihood that the government would have to provide financial support to the banks.
The amount due for the GDP warrants was $665 million.
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