Fitch cuts Ukrzaliznytsia IDR, Shortline LPNs

Fitch Ratings said it downgraded the State Administration of Railways Transport of Ukraine's (Ukrzaliznytsia) long-term local currency issuer default rating to RD (restricted default) from CCC and long-term foreign currency issuer default rating to C from CC.

The agency also downgraded the long-term foreign currency rating on Shortline plc's $500 million loan participation notes (LPNs), of which Ukrzaliznytsia is a guarantor, to C from CC.

Fitch said the downgrade of the local currency issuer default rating to RD follows Ukrzaliznytsia’s announcement that as of May 12, it has failed to make principal payments under certain bilateral loan agreements with Ukrainian lenders. This in turn has caused a cross-default clause under the $500 million LPN due 2018 issued by Shortline and could trigger acceleration of full repayment.

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