OREANDA-NEWS. National Rating Agency has affirmed its 'iSD' credit rating on Ukraine. The outlook for the rating is Negative. NRA's first-time credit rating of 'iSBB-' was assigned to Ukraine's government on Jan. 12, 2008. The latest rating action on Ukraine (the credit rating downgrade to 'iSD') dates Sep. 29, 2015. 

The Negative outlook reflects Ukraine's failure to make a US$ 3 bn payment towards its sovereign debt to Russia (in 2013, Russia bought US$ 3 bn of Ukrainian Eurobonds, using its National Wealth Fund ) and failure to pay a US$ 75 million coupon. The Eurobonds matured on Dec. 20, 2015, and Ukraine was to make the redemption payment on the next business day, that is, on Dec. 21, 2015, but failed to do so. No repayment was made during the 10-day grace period ended Dec. 31, 2015. 

Earlier, in November 2015, Russia proposed the debt extension to 3 yrs from 1 yr, but Ukraine requested the debt restructuring on terms similar to those for private bond holders, that is, writing off of 20% of the principal and restructuring of the rest part of the debt. In addition, Ukraine imposed a moratorium on the payment of a US$ 3bn debt owed to Russia, before Russia had time to accept its repayment terms. Russia's Ministry of Finance has initiated procedures needed to start a legal dispute with Ukraine.