The rating outlook is negative
The international rating agency Standard&Poor`s has changed the Kyiv long-term rating to CC (from CCC), LIGABusinesInform (ЛIГАБiзнесIнформ) reports.
According to the agency, the rating outlook is still “stable”, however it has been entered to a list of those that can be revised as “negative”.
S&P clarifies that the decision to downgrade the rating has been made when the capital’s municipal authorities said they intended to restructure bond debt amounting to 2.625 billion hryvnias (maturing this year). If the restructuring will be approved by the Kyiv Mayor and Ministry of Finance, repayment of arrears will be postponed until 360 days. This decision, in the S&P analytics’ opinion, could lead to default.
The agency underscores the final conclusion on whether to change the outlook will be made just after Kyiv comes up with its decision on the payment terms. The ratings will be raised, if the municipal authorities begin to pay off the debt from October 6, 2014.
