Fitch Upgrades Ukrenergo From RD to CCC After Eurobond Restructuring
Fitch Ratings upgraded Ukrenergo’s credit rating from RD to CCC after the company completed its eurobond restructuring on 15 October. The restructuring reduced total claims from $1.086 billion to $494.75 million, extended repayment periods and freed up about $135 million for grid repairs and energy-system resilience.
Key points
- Fitch raised Ukrenergo’s rating from RD to CCC following the debt restructuring.
- The eurobond restructuring was completed on 15 October.
- Total claims fell from $1.086 billion to $494.75 million.
- The restructured debt carries an interest rate below 8.6% and matures in 2041.
- Ukrenergo issued $395 million of new unsecured bonds at 8.5%, due in 2031.
- The restructuring is expected to save about $135 million.
- Fitch expects Ukrenergo’s financial performance to improve in 2027.
Why it matters
The rating upgrade indicates that Ukrenergo has overcome the immediate threat of default, although significant financial risks remain. The restructuring lowers the company’s debt burden, extends repayment periods and releases about $135 million for damaged grid infrastructure and the resilience of Ukraine’s power system.
What happened
Ukrenergo completed the restructuring of its eurobonds on 15 October. Total claims decreased from $1.086 billion to $494.75 million. The original claims consisted of $825 million in principal and $261 million in accrued interest. The restructured debt carries an interest rate below 8.6% and is due for final repayment in 2041. Ukrenergo also issued $395 million of new unsecured bonds at 8.5%, due in 2031. Fitch Ratings subsequently upgraded the company’s credit rating from RD to CCC. The company plans to direct the savings toward repairing damaged grid infrastructure and strengthening the resilience of Ukraine’s energy system.
How Ukrainian sources describe it
Ukrainian reporting emphasizes the sharp reduction in debt, approximately $135 million in savings and their intended use for grid repairs and energy-system resilience. It also highlights the state-backed financing mechanism, broad investor participation and Ukrenergo’s strategic role in Ukraine’s electricity system.
How international sources describe it
Fitch’s assessment focuses on the upgrade from RD to CCC, the removal of the immediate default threat and an expected improvement in Ukrenergo’s financial performance in 2027. The agency also notes continuing risks from war damage, the high cost of network reconstruction and limited access to financing.
Background
Ukrenergo issued $825 million of eurobonds at 6.875% in 2021, the largest eurobond issue by a Ukrainian non-sovereign issuer. The company and investors deferred payments in 2022 and later extended the maturity to November 2028. After Ukrenergo missed a coupon payment in autumn 2024, bond payments were temporarily suspended. It agreed the debt-operation terms in April 2025 and launched the operation on 28 August. The buyback was funded by a new loan from an international financial development institution, with a state guarantee and political-risk insurance from the US International Development Finance Corporation. By 8 October, 97.49% of holders of outstanding bonds had agreed to participate. As of June 2026, overdue payments were estimated at $240 million and the company’s rating was RD.