The difficult political situation and military conflict in Ukraine almost destroyed the country’s economic system. International observers share the view that the government would have to announce a default on its sovereign debts in the near future. The possibility of such development of the situation is almost 100%, analysts believe. Due to these facts, it is no surprise that Moody’s Investors Service decided to downgrade Ukraine’s credit rating to Ca with the negative outlook and said in a statement that a default is almost certain. “The key driver of the downgrade is the likelihood of external private creditors incurring substantial losses as a result of the government's plan to restructure the majority of its outstanding Eurobonds,” the report released by Moody’s reads. Thus, instead of the pre-default Caa3, Ukraine has its long-term issuer and government debt ratings at Ca. It means that the country has sunk in a default or close to it.
Moody’s analysts warn that private creditors are likely to suffer “substantial losses” as a result of the government’s restructuring plan. “Although negotiations over the specific details of the restructuring are only now getting underway, Moody's believes that the likelihood of a distressed exchange, and hence a default on government debt taking place, is virtually 100%”, the statement says. So, the Ukrainian president would most likely call for financial aid again.