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S&P cuts Ukraine's credit rating as violence continues

February 21, 2014

Credit rating agency S&P downgrades Ukraine's rating following continued unrest and violent clashes between the government and protestors in Kiev.

The agency cut the country's long-term foreign currency rating from CCC+ to CCC, citing their doubts about the govenrment's ability to service its debt amid the turmoil. The S&P have also given the country a negative outlook, possibly suggesting further downgrades.

"We believe [the current situation] raises uncertainty regarding the continued provision of Russian financial support over the course of 2014, and puts the government's capability to meet debt service at increasing risk," the agency said in a statement.

Another setback was the cancellation of the country's plans to raise $2 billion by issuing five-year eurobonds. Ukraine's finance minister announced that the bond issue -- which they had hoped would be bought by Russia -- would not go ahead.

Protests started last November, when Ukrainian President Viktor Yanukovych's government rejected an accord with the European Union, in favor of better relations with Russia. The Russians had promised Ukraine financial assistance and cheaper energy prices.



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Source: UPI Business News

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