S&P Global Ratings has elevated Ukraine’s foreign currency sovereign credit ratings to 'CCC+' for long-term and 'C' for short-term obligations, moving up from the prior 'SD/SD' status after Ukraine finalized a notable restructuring of its GDP-linked debt instruments. The rating outlook remains stable.
This upgrade follows the completion of a $2.6 billion exchange process during which Ukraine swapped GDP warrants for newly issued step-up C bonds and outstanding B bonds, with maturity dates spanning 2030 to 2032. The GDP warrants had previously defaulted due to a missed $670 million payment in June 2025.
S&P assigned a 'CCC+' rating specifically to the new step-up C securities, which feature scheduled principal repayments between 2030 and 2032 alongside incrementally increasing coupon payments. The exchange was executed at a ratio of 1.34 times.
While a minor segment of Ukraine’s commercial debt remains in default—consisting of a foreign bank loan and a sovereign-guaranteed Eurobond from a state-run power company—these liabilities compose less than 2.5% of the total outstanding commercial debt and under 1% of Ukraine’s aggregate debt. Ukrainian officials are reportedly engaged in ongoing restructuring discussions with these lenders.
Following the debt exchanges conducted in 2024 and 2025, Ukraine's annual foreign commercial debt servicing requirements have been substantially reduced, averaging approximately $1.0 billion over the next three years. The inaugural principal payment on a foreign bond is not due until 2029. This diminished debt profile is further underpinned by Ukraine’s record-high foreign exchange reserves, which reached $57.3 billion by the end of 2025.
The 'CCC+' rating reflects S&P’s assessment that Ukraine’s ability to meet its financial commitments remains fragile and heavily reliant on favorable circumstances including progress in the ongoing conflict and sustained international financial backing.
The European Union has pledged a €90 billion loan facility to Ukraine, complemented by funding from other G7 countries, estimated to align with Ukraine’s financing needs for 2026 and 2027. Disbursement of these funds is expected to begin in April, with repayment obligations dependent on the resolution of hostilities and reparations from Russia.
S&P’s baseline foresees continued high-intensity military engagements through 2026, citing significant diplomatic hurdles posed by divergent views between Russia and Ukraine on ceasefire conditions.
Currently, Russian military forces control approximately 20% of Ukraine's territory, accounting for 8-9% of pre-war GDP and affecting 14% and 10% of the country’s industrial and agricultural output respectively. Furthermore, nearly one-third of Ukraine's population has been displaced by the conflict, with around 15% now registered as refugees, primarily within the European Union.
Given these conditions, the rating agency anticipates modest GDP growth and ongoing pressure on public finances unless the security situation ameliorates significantly.