S&P downgraded Ukrzaliznytsia’s credit rating to “CC” from “CCC+.” The company proposed delaying eurobond payments by one year, starting this January. This was reported by the railway transport news portal Railway Supply.

Ukrzaliznytsia

Why Did S&P Downgrade Ukrzaliznytsia’s Credit Rating?

Analysts warned that financial challenges raise the risk of default on existing obligations. They emphasized that debt restructuring is crucial for stabilizing the company’s financial performance.

The outlook remains negative because restructuring is often treated as default, increasing risks for investors. Financial markets are monitoring the company’s actions, which could impact future funding decisions.

Ukrzaliznytsia announced a temporary moratorium to strengthen liquidity and address financial difficulties. It also plans to capitalize $160 million in interest payments to sustain solvency.

S&P’s Forecasts on Ukrzaliznytsia’s Debt Restructuring Plans

S&P cautioned that implementing the restructuring plan might influence upcoming credit rating reviews. Analysts noted that the company must act swiftly to address ongoing financial uncertainties.

Earlier reports indicated that Ukrzaliznytsia is working to minimize the impact of financial challenges. Its strategy focuses on restoring stability through long-term debt management solutions.

The agency will continue monitoring the company’s actions and evaluating potential adjustments to its rating. It also warned that further downgrades are possible if financial conditions deteriorate.

Ukrzaliznytsia believes restructuring measures will help preserve liquidity and maintain operations. However, analysts highlight the risks associated with executing such proposals during volatile market conditions.

Investors perceive the moratorium as a temporary step to address payment issues. Meanwhile, the company remains committed to restoring creditor confidence through consistent financial reforms.

Experts at S&P suggested the restructuring plan could be completed within weeks. They expect these actions to influence the agency’s future rating evaluations.

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