Overview

  • Foreign exchange (FX) reserve accumulation, strengthening growth, and narrowing fiscal deficits underpin our upgrade of Ukraine to 'B' from 'B-'.
  • The new government appears to be committed to preserving macrofiscal stability, liberalizing the economy, and securing a new program with the International Monetary Fund (IMF).
  • The outlook is stable.

Rating Action

On Sept. 27, 2019, S&P Global Ratings raised its global scale long-term foreign and local currency sovereign ratings on Ukraine to 'B' from 'B-' and its Ukraine national scale ratings to 'uaA' from 'uaBBB'. We affirmed the short-term ratings at 'B'. The outlook is stable.

Outlook

The stable outlook reflects our expectation that Ukraine's new government will preserve the macroeconomic reforms of recent years while the economy recovers and general government debt relative to GDP declines. As a result, Ukraine should retain access to domestic and international capital markets, allowing it to meet commercial debt repayments through 2020.

We could consider a positive rating action if we see improvements in growth, fiscal, and external metrics beyond our expectations. We could also consider raising the ratings if inflation converges toward the NBU's target, or if credit growth in real terms picks up and capital controls are lifted.

Downward ratings pressure could build if disruptions to funding from concessional programs or capital market access over the next year call into question Ukraine's ability to meet large external repayments. This in turn could happen if the government were to backtrack on key reforms.

Rationale

Ukraine's economy continues to recover. The National Bank of Ukraine (NBU) has augmented its FX reserves and restrained inflation to below 10%; quasi-fiscal deficits at the state-owned utility, Naftogaz, have been eliminated; and general government debt-to-GDP continues to decline. Ukraine's new administration appears committed to preserving these gains. Moreover, we view positively the new government's intention to improve the business environment and lift the moratorium on the sale of agricultural land. In our opinion, these measures could pave the way for higher foreign investment inflows into Ukraine, boding well for the economy's growth and external leverage.

Our ratings on Ukraine reflect its low per capita income and its challenging institutional and political environment. Our ratings are also constrained by Ukraine's external refinancing risks, reflecting its current account deficits and large external repayment obligations relative to the NBU's FX reserves. The banking system's large--albeit declining--stock of nonperforming loans (NPLs) weighs on the sector's ability to support growth and remains a credit weakness. The full lifting of capital controls, in place since 2014, will be conditional on economic and policy stability.

The ratings are supported by improving government finances, reflected in the declining general government-debt-to-GDP ratio, as well as Ukraine's ongoing implementation of reforms--such as securing the independence of the NBU--which aid the government's ability to access commercial debt markets and receive concessional funding from international financial institutions (IFIs).

Institutional and Economic Profile: The implementation of the president's reform program could pave the way for higher growth and investment inflows into Ukraine

  • Ukraine's new president and government have signaled their intent to continue reforms and engaging with IFIs for concessional financing.
  • While a resolution of the conflict in the Donbas might be a while away, there could be a de-escalation of tensions in eastern Ukraine as relations with Russia thaw.
  • We project real GDP will grow by 3.2% in 2019--revised higher from 2.5%--and by an average of 3% annually over 2020-2022.

Political newcomer Volodomyr Zelensky was elected Ukraine's president in April. His party--the Servant of the People--commands a comfortable majority in the Rada, Ukraine's parliament, boding well for the passage of his ambitious reform agenda. President Zelensky and the new government have signaled their intent to continue to engage with the IMF and other international financial institutions. We believe by extension this implies a preservation of gains made in recent years such as upholding the NBU's independence, liberalizing gas prices to maintain profitability at Naftogaz, pursuing lower fiscal deficits, and operationalizing anti-corruption institutions.

The legislative agenda that President Zelensky aims to drive through parliament includes lifting the moratorium on the sale of agricultural land and measures to improve the business environment. Some measures might prove contentious and are not guaranteed easy passage; however, if implemented they could pave the way for higher foreign investment inflows into Ukraine, particularly into its large agricultural sector.

The NBU has shored up its FX reserves and the government has retained access to commercial financing. While the immediacy of a fresh IMF program has receded, for instance compared to late last year, we would argue that such an arrangement serves to act as an important signal to investors while also facilitating access to funds from other IFIs at concessional rates. In this context, any backtracking on previously implemented reforms could potentially undermine Ukraine's prospects in securing or maintaining on track any successive arrangement with the IMF. In the same vein, a settlement with the former owners of Privatbank--which the state nationalized in 2016 at a cost of $5.5 billion (nearly 6% of 2016 GDP)--could potentially hurt relations with the IMF and other IFIs.

Relations with Russia, strained since 2014, deteriorated further late last year following the Sea of Azov incident. More recently, there has been a slight thaw between the two neighbors. As a sign of goodwill, the two countries exchanged 35 prisoners and intend to recommence talks under the Normandy format. While we do not anticipate the implementation of the Minsk protocol in the near term, there could be some de-escalation in the Donbas.

We have revised up our 2019 real GDP growth projection to 3.2% (from 2.5% earlier) given the economy's strong performance year-to-date, particularly in the second quarter, mostly on domestic demand. Strong wage growth--reflecting net emigration flows, labor mismatches, and minimum wage hikes--and remittances support household consumption growth. The number of Ukrainians working in Poland increased by over 40% in 2018 to 1.7 million, with several hundreds of thousands working in other neighboring countries, partly explaining domestic wage growth averaging more than 10% over the past three years.

Over 2020-2022, we project real GDP growth of 3% on average. In our view, Ukraine would have to attract more investment flows from abroad for a more meaningful and sustained pick-up in growth. In this context, the current government's legislative efforts to effect land reform could lift growth over our current projections as could potential improvements in the business environment. We note investment is just 19% of 2018 GDP, down from the peak of 30% in 2007 prior to the global financial crisis. Another factor inhibiting economic growth is the weak banking sector lending. From 2014 to 2018, real credit growth to the private sector has contracted cumulatively by nearly 65%. While headline credit growth in 2017 and 2018 was positive, it was negative in real terms.

For decades, widespread corruption has weighed on Ukraine's growth performance. The consequences of corruption include overpaying for public procurement, a productivity shortfall in public sector administration, and widespread underinvestment in the real economy where rent-seeking deters competition. At an estimated $1,200 per capita, foreign direct investment (FDI) compares poorly to that of neighboring Poland, an EU member, where FDI per capita is seven times higher. Corruption almost certainly affects domestic SMEs more than it does large foreign multinationals. It also has contributed to an exodus of Ukraine's most talented and productive graduates to work abroad, an option facilitated by Poland's liberalization of entry requirements in recent years.

Risks to our growth projections include a slowdown in external demand for Ukraine's key commodity exports and a flare-up of geopolitical tensions with Russia.

Flexibility and Performance Profile: The government will meet its large debt-service obligations in 2020 via a mix of concessional and commercial financing

  • We anticipate that the government will continue to retain access to capital markets to meet heavy FX redemptions in 2020.
  • We project general government debt to GDP will decline to below 50% in 2021 in both gross and net terms; we forecast payouts from the government's GDP warrants will be contained through 2022.
  • The NBU has embarked on an easing cycle, however real interest rates remain high and we project inflation will continue to trend toward the NBU's target.

The government met its large FX redemptions in 2019 via the proceeds of Eurobonds, debt issuance against the World Bank policy-based guarantee, and domestic bond issuance. Earlier in the year, a Clearstream link was established opening up the domestic local currency bond market to non-residents, who increased purchases of hryvnia-denominated sovereign debt by $3.2 billion (to June 2019) and who now hold about 11% of total hryvnia-denominated government debt.

The move is positive for deepening Ukraine's bond market and for sovereign capital market access. We also think that this development could aid debt management by tilting the mix of government debt away from foreign currency, in which about two-thirds of total sovereign debt is currently denominated. Of course, high non-resident participation in local currency debt can magnify pressures on the exchange rate in times of stress. We estimate that non-residents now hold about 50% of total government commercial debt (Eurobonds and domestically issued paper).

High real interest rates will continue to support local currency issuance through 2020. In 2020, we expect Ukraine to be able to continue to tap both international and domestic markets and to be able to meet about $6 billion (4% of GDP) in external FX redemptions during the year. Repayments toward government FX debt in the domestic market total about $3 billion; we expect the majority of this will be rolled over.

We project that the current account deficit will narrow in 2019 to 2.8% (from 3.3% in 2018) as Ukraine benefits from favorable terms of trade. From 2020, we project a widening of the current account deficit as the contract between Gazprom and Naftogaz for the transit of Russian gas through Ukraine expires in January 2020, though we understand that talks are ongoing. We project that some gas flows will continue to transit through Ukraine in 2020 and 2021. Strong domestic demand will keep the current account deficit over 3% of GDP over 2020-2022, and remittance inflows will continue to aid current account receipts. Given the prevalence of commodities in Ukraine's export basket, price volatility tends to cause fluctuations in current account receipts.

We note that Ukraine's current account deficits are financed more by debt-creating inflows and less so by FDI inflows, net of round-tripping transactions (where capital leaves the country and then is reinvested in the form of FDI). We anticipate a similar mix over the forecast horizon through 2022. The NBU estimates that round-tripping accounted for 20.6% of FDI inflows in 2018. We note that, despite the prevalence of debt in Ukraine's external funding mix, the economy's external liquidity and leverage have been improving since 2014 as current account receipts and usable reserves recover.

We project that the NBU's FX reserves (net of the FX reserves commercial banks are required to maintain with the NBU on their FX liabilities) will cover about 2.5 months of current account payments on average through 2022. In 2019 through August, the NBU took advantage of an appreciating hryvnia to make net purchases of nearly $3 billion. FX reserves reached $22 billion, up from $7.5 billion at end-2014. The NBU intervenes to avoid excessive volatility and to augment reserves.

In line with our expectation of Ukraine's continued engagement with IFIs, we project that the general government deficit will stay about 2% of GDP through our forecast horizon. The government proposals for 2020 envisage defense spending of about one-fifth of the total budget, and 15% on pensions. Dividends from state-owned enterprises, in particular Naftogaz, and the NBU in recent years have been important contributors to budgetary revenue. A convergence of prices charged to end-consumers with market prices has eliminated quasi-fiscal deficits at Naftogaz, aiding fiscal consolidation since 2014 when the general government deficit was 10.3%.

General government debt to GDP is on a downward path as a result of Ukraine's lower fiscal deficits and strong nominal GDP growth. The appreciation of the hryvnia in 2018 further helped government debt metrics. In line with our macroeconomic and fiscal projections, we forecast that this ratio will decline to below 50% in 2021 compared to a peak of 81% in 2016. The forecast remains highly sensitive to future exchange rate developments given that 67% of Ukrainian government debt is FX-denominated.

GDP warrants issued by the government in 2015 represent a contingent fiscal risk; that said, potential payouts through 2022 are relatively contained under our projections. The warrants pay out two years after a year in which real GDP growth exceeds 3%; the payout increases if growth exceeds 4%. Over our forecast horizon, we project that government interest will increase only in 2021--by 0.06 percentage points of general government revenues--given our expectation that real GDP growth will exceed 3% in 2019.

There is a residual risk for Ukraine's government balance sheet from the 2013 $3 billion Eurobond, which was not restructured and is held by Russia. We understand that a U.K. court's 2018 decision to grant a full trial for the case suggests a conclusion may be years out. An adverse ruling and Ukraine's potential refusal to pay in full could eventually lead to legal constraints on Ukraine's ability to repay its commercial debt.

Since being significantly reformed in 2015 and gaining operational independence, the NBU has had reasonable success in containing inflation. It has also started gradually cleaning up the banking system. With inflation on a downward trend, the NBU has started to ease monetary policy with two rate cuts in 2019. With the key policy rate now at 16.5%, real interest rates are still high. Given our expectation of depreciation pressures on the Ukrainian hryvnia from 2020 and pass-through into domestic prices, as well as relatively strong wage growth, we forecast that inflation will approach but stay outside the NBU's medium-term target of 5% +/-1%. Imported energy prices could push inflation up higher than we currently forecast. Broader macroeconomic stability, a more stable exchange rate, and replenished FX reserves should also enable the NBU to continue gradually easing its capital account restrictions.

The Ukrainian banking sector returned to profitability in 2018, but banks continue to grapple with very high NPLs. In April 2019, the system's NPLs stood at 51.7% of total loans. We note this figure is exacerbated by PrivatBank, which has NPLs amounting to more than 80% of its loan portfolio, due to its corporate loan book comprising almost entirely related-party lending. State-owned banks comprise 70% of the system's NPLs. The government's strategy for these banks includes a gradual clean-up and eventual part-privatization of at least two of the four--Oschadbank and PrivatBank. With reforms at all four state-owned banks progressing--albeit at a slower pace at Ukreximbank and Oschadbank--we do not expect any additional recapitalization needs from the central government over the next year.

Key Statistics

Table 1

Ukraine Selected Indicators
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Economic indicators (%)
Nominal GDP (mil. UAH) 1,465 1,587 1,989 2,385 2,984 3,559 4,003 4,453 4,954 5,470
Nominal GDP (bil. $) 180 132 91 93 112 131 146 163 179 194
GDP per capita (000s $) 3.9 2.9 2.1 2.2 2.6 3.1 3.5 3.9 4.3 4.7
Real GDP growth (0.0) (6.6) (9.8) 2.4 2.5 3.3 3.2 3.0 3.0 3.0
Real GDP per capita growth 0.2 (6.3) (4.5) 2.8 2.9 3.8 3.8 3.5 3.5 3.5
Real investment growth (8.4) (24.0) (9.2) 20.4 16.1 14.3 7.5 7.2 6.5 6.2
Investment/GDP 18.5 13.4 15.9 21.7 19.9 18.8 19.4 20.1 20.5 20.8
Savings/GDP 9.3 9.9 17.7 20.3 17.8 15.5 16.6 16.9 17.3 17.3
Exports/GDP 43.0 48.6 52.6 49.3 48.0 45.2 47.8 46.5 45.2 44.2
Real exports growth (8.1) (14.2) (13.2) (1.8) 3.8 (1.6) 3.0 3.0 3.3 3.3
Unemployment rate 7.7 9.7 9.5 9.7 9.9 9.1 8.5 8.0 7.5 7.5
External indicators (%)
Current account balance/GDP (9.2) (3.5) 1.8 (1.4) (2.2) (3.3) (2.8) (3.2) (3.2) (3.5)
Current account balance/CARs (17.6) (6.2) 2.8 (2.3) (3.6) (5.6) (4.7) (5.5) (5.7) (6.4)
CARs/GDP 52.1 56.3 64.2 61.6 60.6 58.1 59.8 57.6 55.9 54.5
Trade balance/GDP (12.3) (5.4) (3.8) (7.4) (8.6) (9.6) (9.5) (9.7) (9.8) (10.1)
Net FDI/GDP 2.3 0.2 3.3 3.5 2.3 1.8 1.5 1.5 1.5 1.5
Net portfolio equity inflow/GDP 0.7 (0.3) 0.2 0.2 0.1 (0.0) 0.0 0.0 0.0 0.0
Gross external financing needs/CARs plus usable reserves 146.0 154.6 166.5 146.1 135.8 130.7 122.8 121.8 121.8 121.6
Narrow net external debt/CARs 108.1 135.7 152.2 143.1 119.3 103.6 91.8 87.9 85.5 84.4
Narrow net external debt/CAPs 91.9 127.8 156.6 139.8 115.2 98.1 87.7 83.3 80.9 79.3
Net external liabilities/CARs 71.5 67.2 56.3 47.1 37.7 29.1 29.7 33.0 36.6 40.9
Net external liabilities/CAPs 60.8 63.3 57.9 46.0 36.4 27.5 28.4 31.3 34.6 38.4
Short-term external debt by remaining maturity/CARs 62.9 85.0 88.5 76.5 62.3 56.5 46.6 44.1 43.2 41.6
Usable reserves/CAPs (months) 2.4 2.7 1.4 2.6 2.6 2.7 2.7 2.6 2.5 2.5
Usable reserves (mil. $) 17,618 6,698 12,858 15,062 18,252 20,331 21,489 22,183 22,947 23,147
Fiscal indicators (general government; %)
Balance/GDP (6.2) (10.3) (3.2) (2.2) (1.4) (2.1) (2.2) (2.1) (2.0) (2.0)
Change in net debt/GDP 4.7 31.8 21.8 15.3 6.1 1.0 1.1 2.8 2.6 2.6
Primary balance/GDP (3.7) (7.0) 1.3 1.9 2.4 1.2 0.7 0.5 0.4 0.3
Revenue/GDP 43.4 40.5 42.4 38.5 40.3 39.8 40.0 41.0 41.2 41.5
Expenditures/GDP 49.6 50.7 45.5 40.7 41.7 41.9 42.2 43.1 43.2 43.5
Interest/revenues 5.6 8.2 10.5 10.6 9.3 8.2 7.2 6.3 5.7 5.4
Debt/GDP 39.9 69.4 79.1 81.1 71.8 60.9 55.3 52.5 49.8 47.7
Debt/revenues 91.9 171.5 186.6 210.3 178.1 153.0 138.3 128.1 121.0 115.0
Net debt/GDP 39.3 68.1 76.1 78.7 69.0 58.9 53.5 50.9 48.4 46.4
Liquid assets/GDP 0.6 1.3 3.0 2.3 2.7 2.1 1.8 1.6 1.5 1.3
Monetary indicators (%)
CPI growth (0.2) 12.1 48.7 13.9 14.4 11.0 8.8 7.0 6.5 5.5
GDP deflator growth 4.3 15.9 38.9 17.1 22.1 15.4 9.0 8.0 8.0 7.2
Exchange rate, year-end (LC/$) 8.24 15.82 24.03 27.30 28.10 27.72 27.00 27.50 28.00 28.50
Banks' claims on resident non-gov't sector growth 12.8 11.8 (2.4) (1.6) 1.2 5.4 6.0 6.5 7.5 7.5
Banks' claims on resident non-gov't sector/GDP 64.8 66.9 52.1 42.8 34.6 30.6 28.8 27.6 26.6 25.9
Foreign currency share of claims by banks on residents 29.2 40.0 48.4 38.9 32.2 30.5 41.9 41.9 41.9 41.9
Foreign currency share of residents' bank deposits 37.0 45.9 45.3 46.3 46.0 42.0 42.0 42.0 42.0 42.0
Real effective exchange rate growth (3.5) (21.7) (6.9) (0.5) 5.2 6.4 N/A N/A N/A N/A
Sources: State Statistics service of Ukraine (Economic Indicators), National Bank of Ukraine, State Statistics service of Ukraine (External Indicators), Ministry of Finance of Ukraine, State Statistics service of Ukraine (Fiscal Indicators), and National Bank of Ukraine, International Monetary Fund (Monetary Indicators).
Adjustments: Usable reserves calculated by subtracting required reserves for resident foreign-currency deposits from reported international reserves. General government expenditures calculated as reported expenditure plus expenditure related to Naftogaz. Government debt calculated as reported state debt plus state guarantees.
Definitions: Savings is defined as investment plus the current account surplus (deficit). Investment is defined as expenditure on capital goods, including plant, equipment, and housing, plus the change in inventories. Banks are other depository corporations other than the central bank, whose liabilities are included in the national definition of broad money. Gross external financing needs are defined as current account payments plus short-term external debt at the end of the prior year plus nonresident deposits at the end of the prior year plus long-term external debt maturing within the year. Narrow net external debt is defined as the stock of foreign and local currency public- and private- sector borrowings from nonresidents minus official reserves minus public-sector liquid assets held by nonresidents minus financial-sector loans to, deposits with, or investments in nonresident entities. A negative number indicates net external lending. N/A--Not applicable. UAH--Ukrainian hryvnia. CARs--Current account receipts. FDI--Foreign direct investment. CAPs--Current account payments. e--Estimate. f--Forecast. The data and ratios above result from S&P Global Ratings' own calculations, drawing on national as well as international sources, reflecting S&P Global Ratings' independent view on the timeliness, coverage, accuracy, credibility, and usability of available information.

Ratings Score Snapshot

Table 2

Ukraine Ratings Score Snapshot
Key rating factors Score Explanation
Institutional assessment 5 Reduced predictability of future policy responses because of moderate risk of challenges to political institutions. Relatively weak transparency and uncertain checks and balances between institutions.
Ukraine continues to face external security risks with the ongoing conflict in the East.
Economic assessment 5 Based on GDP per capita ($) as per the Selected Indicators table above.
External assessment 5 Based on narrow net external debt and gross external financing needs as per Selected Indicators in Table 1.
There is a risk of marked deterioration in the cost of or access to external financing.
Fiscal assessment: flexibility and performance 3 Based on the change in net general government debt (% of GDP) as per Selected Indicators in Table 1.
The sovereign faces unaddressed medium-term pressure due to age-related expenditure. The pension reform in 2017 falls short of an outright increase in the statutory retirement age and some provisions may reduce incentives to work until 65. We believe further adjustments will be required to allow Ukraine's large pension fund deficit to decline to sustainable levels.
Fiscal assessment: debt burden 4 Based on net general government debt (% of GDP) and general government interest expenditures (% of general government revenues) as per Selected Indicators in Table 1.
Over 40% of gross government debt is denominated in foreign currency.
The banking sector’s exposure to the government exceeds 20% of its assets.
Monetary assessment 6 The hryvnia generally floats freely with intermittent interventions from the NBU. The central bank's track record of operational independence is relatively short.
The transmission mechanism is weak, as demonstrated by the high level of NPLs and weak credit growth.
Foreign exchange restrictions are applied, and Ukraine is not compliant with IMF Article VIII obligations.
Indicative rating b As per Table 1 of "Sovereign Rating Methodology."
Notches of supplemental adjustments and flexibility 0 None
Final rating
Foreign currency B
Notches of uplift 0 Default risks do not apply differently to foreign- and local-currency debt.
Local currency B
S&P Global Ratings' analysis of sovereign creditworthiness rests on its assessment and scoring of five key rating factors: (i) institutional assessment; (ii) economic assessment; (iii) external assessment; (iv) the average of fiscal flexibility and performance, and debt burden; and (v) monetary assessment. Each of the factors is assessed on a continuum spanning from 1 (strongest) to 6 (weakest). S&P Global Ratings' "Sovereign Rating Methodology," published on Dec. 18, 2017, details how we derive and combine the scores and then derive the sovereign foreign currency rating. In accordance with S&P Global Ratings' sovereign ratings methodology, a change in score does not in all cases lead to a change in the rating, nor is a change in the rating necessarily predicated on changes in one or more of the scores. In determining the final rating the committee can make use of the flexibility afforded by §15 and §§126-128 of the rating methodology.

Related Criteria

Related Research

  • Sovereign Ratings List, Sept. 4, 2019
  • Sovereign Ratings History, Sept. 4, 2019
  • Sovereign Ratings Score Snapshot, Sept. 2, 2019
  • Banking Industry Country Risk Assessment Update: Aug. 2019, Aug. 27, 2019
  • Fed Saved The Day, Or Did It? Aug. 5, 2019
  • Global Sovereign Rating Trends: Midyear 2019, July 25, 2019
  • EMEA Emerging Markets Sovereign Rating Trends Midyear 2019, July 26, 2019
  • Sovereign Risk Indicators, July 11, 2019. Interactive version available at http://www.spratings.com/sri
  • The U.S.-China Trade War: The Global Economic Fallout, May 22, 2019
  • Default, Transition, and Recovery: 2018 Annual Sovereign Default And Rating Transition Study, March 15, 2019
  • Banking Industry Country Risk Assessment: Ukraine, Jan. 2, 2018

In accordance with our relevant policies and procedures, the Rating Committee was composed of analysts that are qualified to vote in the committee, with sufficient experience to convey the appropriate level of knowledge and understanding of the methodology applicable (see 'Related Criteria And Research'). At the onset of the committee, the chair confirmed that the information provided to the Rating Committee by the primary analyst had been distributed in a timely manner and was sufficient for Committee members to make an informed decision.

After the primary analyst gave opening remarks and explained the recommendation, the Committee discussed key rating factors and critical issues in accordance with the relevant criteria. Qualitative and quantitative risk factors were considered and discussed, looking at track-record and forecasts.

The committee's assessment of the key rating factors is reflected in the Ratings Score Snapshot above.

The chair ensured every voting member was given the opportunity to articulate his/her opinion. The chair or designee reviewed the draft report to ensure consistency with the Committee decision. The views and the decision of the rating committee are summarized in the above rationale and outlook. The weighting of all rating factors is described in the methodology used in this rating action (see 'Related Criteria And Research').

Ratings List

Upgraded; Ratings Affirmed
To From

Ukraine

Sovereign Credit Rating B/Stable/B B-/Stable/B
Ukraine National Scale uaA/--/-- uaBBB/--/--
Transfer & Convertibility Assessment B B-
Senior Unsecured B B-
Senior Unsecured D D

Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at www.standardandpoors.com for further information. Complete ratings information is available to subscribers of RatingsDirect at www.capitaliq.com. All ratings affected by this rating action can be found on S&P Global Ratings' public website at www.standardandpoors.com. Use the Ratings search box located in the left column. Alternatively, call one of the following S&P Global Ratings numbers: Client Support Europe (44) 20-7176-7176; London Press Office (44) 20-7176-3605; Paris (33) 1-4420-6708; Frankfurt (49) 69-33-999-225; Stockholm (46) 8-440-5914; or Moscow 7 (495) 783-4009.

Primary Credit Analyst:Aarti Sakhuja, London (44) 20-7176-3715;
aarti.sakhuja@spglobal.com
Secondary Contact:Ravi Bhatia, London (44) 20-7176-7113;
ravi.bhatia@spglobal.com
Research Contributor:Sarthak Maiti, CRISIL Global Analytical Center, an S&P Global Ratings affiliate, Mumbai
Additional Contact:EMEA Sovereign and IPF;
SovereignIPF@spglobal.com

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