Jan 22 - In a report published to today, Standard & Poor's Ratings Services
said it expected the government of Ukraine's gross financing needs, and those of
the National Bank of Ukraine (NBU, the central bank) to remain elevated over the
medium term (see "No Medium-Term Respite For Ukraine's High External Financing
Needs"). The main components of the gross financing needs are likely to remain
the government's annual deficit and the servicing of domestic (local currency)
government debt. In addition, a sharp increase in government and NBU foreign
currency debt service to the International Monetary Fund (IMF) triggered a
corresponding spike in external financing needs in 2012.
We expect repayment of IMF loans to keep external financing needs at
historically high levels in 2013-2017. As a result of this external debt
service and the NBU's attempts to defend the exchange rate, foreign currency
reserves at the NBU declined to $29 billion in October 2012 (latest available
data) from $32 billion at the beginning of the year. The cost of both domestic
and external government borrowing remains high. These factors contributed to
our Dec. 7, 2012, lowering of our long-term foreign and local currency
sovereign credit ratings on Ukraine to 'B' from 'B+'.
The report is available to subscribers of RatingsDirect on the Global Credit
Portal at www.globalcreditportal.com. If you are not a RatingsDirect
subscriber, you may purchase a copy of the report by calling (1) 212-438-7280
or sending an e-mail to firstname.lastname@example.org. Ratings
information can also be found on Standard & Poor's public Web site by using
the Ratings search box located in the left column at www.standardandpoors.com.