Fitch upgrades Ukraine’s credit rating from restricted default to CCC

On December 22, Fitch Ratings upgraded Ukraine’s long-term foreign currency rating from "Restricted Default" (RD) to "CCC", indicating a high level of credit risk, the agency said in a statement.

This is the first time Ukraine’s rating has returned to this level since 2022, at the start of Russia’s full-scale invasion.

Fitch’s decision follows the successful restructuring of Ukraine’s GDP-linked warrants, which предусматриває їх обмін на нові облігації. These new securities received a higher rating of "CCC+" due to enhanced investor protections: in the event of future restructurings, their principal value could double.

Overall, Ukraine has restructured about 94% of its external commercial public debt, Fitch said.

Ukraine’s financial position is further supported by a large-scale €90 billion loan from the European Union for 2026–2027, which significantly reduces short-term default risks. Repayment of this loan will be deferred until Russia pays reparations.

Despite the upgrade, Ukraine’s rating continues to reflect substantial credit risks related to the ongoing war and its economic impact. Fitch notes that key elements of a potential peace agreement remain unresolved, making a swift end to hostilities unlikely.

The rating is also constrained by long-standing institutional weaknesses, including a low level of rule of law and high corruption risks.

In August 2024, Fitch downgraded Ukraine’s rating to "Restricted Default" after the government launched the restructuring of its Eurobonds. Before that, the rating stood at the pre-default level of "C".