The US ratings agency S&P cut Ukraine's credit rating to "selective default" on Friday, citing the war-torn country's failure to make a coupon payment on an existing bond.
"The rating actions reflect the missed payment on the coupon of Ukraine's 2026 Eurobond," S&P said in a statement explaining its decision to downgrade Ukraine's credit rating to "SD/SD" from "CC/C."
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"We do not expect the payment within the bond's contractual grace period of 10 business days," it continued, adding that this view was based on "the passage of a Ukrainian law in mid-July that authorizes the government to temporarily suspend payments" on some debt liabilities.
S&P's decision follows the July 24 decision by Fitch -- another top US ratings agency -- to downgrade Ukraine's credit rating to "C" from "CC," leaving it just one notch above default.
Fitch said in a statement that its decision was based in part on its view that an agreement Ukraine struck with some Eurobond holders "marks the start of a default-like process."
Ukraine's economy has been battered by the ongoing Russian invasion, which is now well into its third year.
The International Monetary Fund recently downgraded Ukraine's economic outlook, citing a series of "devastating" Russian attacks against its energy infrastructure, while approving a $2.2 billion payout to support the country's budget under an existing loan agreement.
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