Alona Lebedieva: What Ukraine’s Credit Rating Upgrade Means
Alona Lebedieva
“This means that the agency no longer considers Ukraine to be a borrower in a state of technical default on its key obligations,” notes Alona Lebedieva, owner of the Ukrainian diversified industrial and investment group Aurum Group.
S&P stated that the further restructuring of a minor portion of debt that remains in default does not pose a systemic risk to the state’s ability to meet its other debt obligations. The upgrade is consistent with the approach taken by Fitch Ratings, which earlier also removed Ukraine from selective default status after revising its debt agreements.
A key outcome of the restructuring was the complete removal from the debt structure of instruments linked to GDP growth.
“They were replaced with traditional debt securities, eliminating the risk of an automatic and sharp increase in payments in the event of a rapid post-war economic recovery,” Alona Lebedieva emphasizes.
Market reaction was moderate but positive: zero-coupon bonds maturing in 2035–2036 rose in price by approximately three cents, placing them among the best-performing securities across selected emerging markets.
The upgrade to CCC+ does not change Ukraine’s status as a high-risk borrower and does not reopen access to market financing. The key obstacle to returning to bond issuance and attracting commercial loans remains the war, under which market risks for private creditors are unacceptably high.
At the same time, the decision marks the completion of an important transitional phase—from managing a crisis-driven default state to a more predictable debt configuration.
“For rating agencies, what matters is not the level of debt per se, but the state’s ability to control future fiscal obligations,” Alona Lebedieva stresses. This very risk was reduced through the elimination of growth-linked instruments from the debt structure.
In the medium term, the impact of the rating upgrade will be more institutional than financial. It reduces legal and budgetary uncertainty in the post-war recovery scenario and facilitates further negotiations with official and private creditors. At the same time, the future trajectory of the credit rating will depend not on technical debt decisions, but on the security situation, the scale of external financing, and the actual pace of economic recovery after the war ends.
Alona Lebedieva
Aurum Group
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