The international rating agency Fitch Ratings has significantly downgraded the long-term issuer default rating for the joint-stock company “Ukrzaliznytsia” in both national and foreign currencies – from “CC” to “C”. The reason for this decision was the missed coupon payment on the company’s bonds.
This is reported by Finway
Details of the Rating Downgrade and Bonds
In particular, Fitch noted that the “C” rating was assigned not only to the company’s senior unsecured obligations but also to the senior unsecured loan participation notes (LPNs). The downgrade affected bonds totaling $703.2 million with an interest rate of 8.250% and a maturity date in 2026, as well as bonds totaling $351.9 million with a rate of 7.875% maturing in 2028. All these LPNs were issued through a specialized subsidiary, Rail Capital Markets Plc, registered in the United Kingdom.
Agency Assessment and Possible Consequences
According to Fitch’s rating definitions, a “C” level in both international and national scales indicates that default on the obligation is inevitable.
A key factor for the rating review was the missed interest payment that was due on January 9, 2026. If Ukrzaliznytsia does not reach an agreement with bondholders regarding new payment terms or fails to make the payment before the end of the grace period, Fitch plans to downgrade the company’s rating further – to the level of RD (restricted default).