S&P lowers Kyiv's long-term rating from B- to CCC+

MOSCOW. June 1 (Interfax) - The international rating agency S&P Global Ratings has lowered our ratings on the Ukrainian capital Kyiv to CCC+ from B- and assigned a negative outlook.

Kyiv's rating was revised after S&P lowered its long-term foreign currency sovereign credit rating on Ukraine on May 27, the Ukrainian media said, citing the agency's statement. The agency caps the ratings on Ukrainian local and regional governments at the level of the transfer and convertibility (T&C) when the sovereign is rated in the CCC category or below.

"While our T&C assessment for Ukraine directly constrains our foreign currency issuer credit rating on Kyiv, it may also indirectly affect our local currency issuer credit rating, for instance in case of debt restructuring," it said.

According to S&P data, as of mid-April, the city of Kyiv had sufficient liquidity (8 billion Ukrainian hryvni, equivalent to about $270 million) to cover its debt service over the next 12 months. Meanwhile, in case of a foreign currency debt restructuring, the city might adopt a decision to restructure its local currency obligations, as it happened in 2015.

The agency said that it could also lower the ratings if Kyiv's liquidity position were to deteriorate significantly or there were indications that the city might de-prioritize debt service in preference of meeting spending needs and in the event of a sovereign rating downgrade. S&P could also revise the outlook to stable in case of a similar action on the sovereign rating.

As reported, S&P Global Ratings lowered its long-term and short-term foreign currency sovereign credit ratings on Ukraine from 'B-/B' to 'CCC+/C' and set Ukraine's national currency ratings at B-/B and uaBBB-.