S&P lowers Ukrzaliznytsia rating to CCC

MOSCOW. June 3 (Interfax) - The international rating agency S&P Global Ratings has lowered the rating on JSC Ukrzaliznytsia (Ukrainian Railways, UR) to CCC from CCC+ due to the ongoing conflict in Ukraine, and has placed it on CreditWatch with negative implications.

"The Russia-Ukraine conflict continues to pose significant risks to Ukraine's economic growth, financial stability, external position, and public finances, increasing the risks of liquidity pressure at the sovereign level," S&P said in a press release.

The agency sees uncertainty regarding the Ukrainian government's capacity to continue providing ongoing and extraordinary financial support to Ukrzaliznytsia, and believes that the company's assets are at risk of being further damaged, and possibly rendered inoperable, thus affecting its ability to generate cash flows. Ukrzaliznytsia has received 12 billion hryvni in state financing since martial law was declared in Ukraine, it said.

"We believe that the risk that UR will be subject to liquidity pressure during the next 12 months has increased. As a result, we lowered our rating on UR to CCC from CCC+ and placed it on CreditWatch with negative implications," S&P said.

The CreditWatch placement indicates that S&P could lower its rating on Ukrzaliznytsia if the agency deems that the Ukrainian company will not be able to make payments in accordance with the existing maturity schedule of its debt.