Arya News - Ukraine has defaulted on its GDP-linked securities after failing to make the latest payment on its government debt, according to a statement by the international ratings agency Standard and Poor`s (S&P).
"Ukraine has missed the US$0.67 billion payment on its GDP-linked securities due on June 2, 2025," the agency said on Tuesday. "We therefore lowered our issue rating on the GDP-linked securities to "D" (default) from "CC"."The agency noted that it downgraded the rating because it does not anticipate the Ukrainian government will make any payments during the 10-day grace period, citing a moratorium on such payments.At the same time, S&P affirmed Ukraine’s "SD/SD" (selective default) foreign currency (FC) rating, according to the statement.The Ukrainian Finance Ministry said on Friday that Kiev will not repay more than $665 million in government debt due to a moratorium on payments.In late April, Ukrainian media reported that the country"s leadership had held negotiations with investors holding 30% of GDP warrants on restructuring $2.6 billion in government debt, but no agreement had been reached, and discussions were ongoing ahead of the $600 million payment due in May.A GDP warrant is a government security where payments are linked to GDP growth: if a certain figure is exceeded, holders receive additional payments. This financial instrument"s profitability is linked to a country"s economic performance. Ukraine is obliged to pay on GDP warrants of 2015 if GDP growth exceeds 3%, which happened in 2023.