MOSCOW, July 23. /TASS/. International ratings agency Fitch said it had downgraded Ukraine's Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR) to 'C' from 'CCC'.

On July 20, the Ukrainian government formally launched a consent solicitation to defer external debt repayments for 24 months. Fitch said it viewed the process as the initiation of a distressed debt exchange (DDE) process, consistent with ratings of 'C' for both the LTFC IDR and affected securities.

Moreover Fitch experts expect a broader restructuring of the government's commercial debt to be required, although the timing remains uncertain. This reflects severe stresses to Ukraine's macro-financial position, public finances and external finances as a result of the country’s protracted conflict with Russia.

On July 20, the Ukrainian Cabinet of Ministers resolved to seek a two-day deferral of external debt payments. For the deal to come into force, the Kiev government is supposed to agree on new terms with the debt holders. The international group of Ukraine’s creditors, which includes Britain, Canada, France, Germany, Japan and the United States, supported Kiev’s request to suspend debt repayments until the end of 2023. The group also urged Ukraine’s private-sector bondholders to show a similar approach.

According to Bloomberg's estimates, Ukraine faces a $1.4 billion redemption and interest payments on September 1.