Fitch raises Ukrenergo rating to CCC following debt restructuring

Fitch raises Ukrenergo rating to CCC following debt restructuring
Fitch raises Ukrenergo rating to CCC following debt restructuring

International rating agency Fitch Ratings assessed the financial condition of Ukrenergo, raising its long-term credit rating. According to the experts' decision, the company's status has been changed from RD (restricted default) to CCC. This decision was made following the successful completion of the debt restructuring procedure.

Reduced default threat

Fitch analysts note that the restructuring carried out allowed for a reduction in the current debt burden and an extension of loan repayment terms. This means that the company is no longer under direct threat of being unable to meet its financial obligations in the near term.

Factors affecting risks

Despite the rating improvement, the agency emphasises that the overall level of financial risks remains significant. Fitch cites the following key factors as holding back further rating growth:

  • limited access to funding markets;
  • consequences of Russian shelling of infrastructure;
  • the need for constant restoration of power grids;
  • the company's limited liquidity.

Terms of the new agreement

As reported by Ukrenergo's press service, the restructuring process was completed on 15 October. The previous claim on the eurobonds, including accrued interest, amounted to USD 1.086 billion.

Under the new agreement, the debt structure has been changed as follows:

  • the amount of obligations with final repayment in 2041 stood at USD 494.75 million;
  • new unguaranteed bonds worth USD 395 million with repayment in 2031 were issued.

According to the company's estimates, the change in principal debt terms and interest rates will save approximately USD 135 million. These funds are planned to be directed towards the restoration of energy infrastructure.

Financial performance forecast

Fitch forecasts an improvement in Ukrenergo's financial results in 2027. According to the agency's data, the EBITDA indicator is expected to grow from approximately UAH 4 billion in 2026 to almost UAH 10 billion the following year.

When determining the rating, experts also take into account the company's close ties with the state, which guarantees around 80% of its debt. At the same time, Fitch notes that the state's capacity to support the energy holding is limited by Ukraine's overall financial situation.

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