Fitch downgrades Ukrainian Railways' rating to 'C' after missed coupon payment

MOSCOW. Jan 20 (Interfax) - Fitch Ratings has downgraded the Long-Term Foreign- and Local Currency Issuer Default Ratings (IDRs) of Ukrainian Railways (Ukrzaliznytsia) to 'C' from 'CC' after the Ukrainian company missed a coupon payment, Ukrainian media reported, citing a statement on the Fitch website.

Failure to pay the coupon with the grace period would result in a downgrade to Restricted Default (RD), the statement said.

As reported, Ukrainian Railways on January 12 announced the suspension of the payment of $45-million interests on the 2026 and 2028 loan participation notes (LPNs) due on January 9 and 15, respectively. The company also signaled its intention to engage with the holders of the 2026 and 2028 LPNs to pursue a broader restructuring of these instruments, in hiring financial and legal advisors.

It was said then that the company's own funds were not enough to finance its operations. The company was mulling sources of external financing, but such financing is mainly provided only to cover critical costs, according to the information.

In January 2025, Ukrainian Railways capitalized coupon payments deferred as a result of a restructuring in 2022 on $108.28 million of 8.25% Eurobonds maturing in 2026 and on $51.9 million of 7.875% bonds maturing in 2028. The move increased those issues to $703.18 million and $351.9 million, respectively.

Ukrainian Railways said in its presentation in June 2025 that it accounts for 61% of cargo traffic and for around 25% of passenger traffic by rail within Ukraine. The company is also one of the country's largest employers with a staff of 180,000. Ukrainian Railways has more than 1,400 stations, 2,000 locomotives, 33,700 freight cars and 1,700 passenger cars on its balance sheet.