S&P upgrades Ukraine's rating to B+ from B.

By bne IntelliNews August 2, 2010
The Standard&Poor's international rating agency has upgraded the long-term rating of Ukraine in foreign currency from B to B+, the agency said. The agency also upgraded long-term rating of Ukraine in national currency from B+ to BB-. The S&P withdrew Ukraine's ratings from the CreditWatch list where they have been since July 22. Standard & Poor's raised the long-term Ukraine national-scale rating by one notch to 'uaAA-' from 'uaA+'. The transfer and convertibility assessment was also raised to 'B+', in line with the foreign currency rating, and the recovery rating on the unsecured debt remains unchanged at '4'. The rating action follows the approval by the IMF's Executive Board of a 29-month (USD 15.15bn) stand-by arrangement, providing a policy anchor and giving Ukraine immediate access to around USD 2bn of financing. The agency said that the government's decision to increase domestic gas tariffs is an encouraging sign for the new government's political resolve to restore the finances of Naftogaz and meet the terms of the IMF. The agency noted that permanent shift to a more sustainable fiscal position on the back of a permanent improvement in the finances of state-owned utility the Naftohaz Ukrainy national joint-stock company and the social security system could lead to further ratings improvements, as could a reduction in the country's vulnerability to terms-of-trade and other external shocks.

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