Fitch downgrades DTEK

Fitch Ratings said it downgraded DTEK Holdings BV’s long-term local-currency issuer default rating to CCC from B-, short-term local-currency issuer default rating to C from B and national long-term rating to BB+(ukr) from AA+(ukr).

The agency also said it affirmed the company’s long-term foreign-currency issuer default rating at CCC, short-term foreign-currency issuer default rating at C and foreign-currency senior unsecured rating at CCC.

DTEK Finance BV’s foreign-currency senior unsecured rating was affirmed at CCC with a recovery rating of RR4.

DTEK Finance plc’s foreign-currency senior unsecured rating also was affirmed at CCC.

The company’s stand-alone rating is no longer constrained by the country ceiling and is commensurate with a CCC rating, the agency said.

This is due to the company’s exposure to political and economic instability and uncertainty, which is likely to adversely affect its credit metrics, potential refinancing risk and high foreign-currency risk, Fitch said.

Political developments in Ukraine have been quite unstable in 2014 as the Crimea region is under control of the Russian Federation and the Donetsk and Lugansk regions are in military conflict, the agency said.

This adds to political and economic uncertainty with the agency forecasting a 5% decline in Ukraine’s GDP for 2014, Fitch said.

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