The international rating agency Fitch Ratings upgraded the long-term issuer default rating (IDR) of PJSC “National Energy Company “Ukrenergo” to “CCC” from “RD” (restricted default) following the restructuring of its state-guaranteed “green” bonds worth $825 million with a coupon rate of 6.875% per annum, on which interest of $261 million had also accrued.
“The rating upgrade reflects Fitch’s view that Ukrenergo no longer faces an immediate risk of default following the completion of the restructuring in October 2026, which reduced its debt and extended its debt maturities,” the agency noted in a statement on its website.
It added that the rating also reflects close ties to Ukraine, which has a “CCC” rating, as the government guarantees approximately 80% of Ukrenergo’s debt.
Fitch noted that Ukrenergo’s standalone credit profile (SCP) remains constrained due to limited access to financing, a weak operating environment in Ukraine, war-related disruptions, high volatility in energy demand and supply following shelling, and the need to maintain grid operations, which negatively impacts the company’s liquidity and financial performance. At the same time, the SCP reflects Ukrenergo’s monopoly role in electricity transmission and the “cost-plus” tariff system, which supports its financial results.
The agency noted that 97.5% of bondholders agreed to the restructuring. A portion of their bonds was repurchased at 67.4% of face value, and in exchange for the remainder, they received new unsecured bonds totaling $395 million with a yield of 8.5% and a maturity date in 2031.
Ukrenergo financed the cash component by raising $494.8 million through the issuance of secured restructuring bonds with an 8.6% interest rate and a maturity date in 2041 by a special purpose vehicle (SPV), Mavka Finance DAC. These bonds are insured against political risks by the U.S. International Development Finance Corporation (DFC). In turn, Mavka Finance DAC received from Ukrenergo modified bonds totaling $494.8 million, maturing in 2041 and retaining the state guarantee. Ukrenergo pays the SPV the proceeds from the restructured bonds, while the SPV uses the funds received from Ukrenergo to service the DFC-insured bonds.
Fitch forecasts that Ukrenergo’s EBITDA will fall to 4 billion UAH in 2026 from 8.4 billion UAH in 2025, primarily due to losses from balancing operations. However, according to the agency’s estimates, it is expected to recover to nearly 10 billion UAH in 2027, driven by improved results from balancing operations following anticipated favorable regulatory changes and an increase in electricity transmission tariffs due to an improved revenue-to-expense ratio. The tariff increases, the most recent of which was a 25% hike in August 2026, reflect a decline in transmission volumes in 2026 and rising costs, including technical losses and increased debt service payments, according to the press release. Transmission volumes are likely to fall by approximately 6% in 2026 and remain low in 2027, according to Fitch.
“We expect the average transmission tariff to rise by approximately 17% in 2027 and by 8% in 2028, reflecting rising costs and declining volumes,” the statement said.
The agency emphasized that Russian attacks on energy infrastructure remain the main risk for Ukrenergo, and the company’s top priority is repairing and maintaining the operational capacity of its power grid, which is consuming resources and depleting liquidity. The company is actively seeking grants and debt financing from international financial institutions (IFIs). Fitch expects capital expenditures to average more than 8 billion UAH per year in 2026–2028, excluding capital expenditures directly financed by IFIs and donors.
The agency noted that all Ukrainian energy companies it rates face limited liquidity and high operational risks.
Ukrenergo’s Rating “CCC” reflects a reduction in the risk of immediate refinancing following the restructuring, in contrast to DTEK Energy BV’s “CCC-” rating with bonds maturing in December 2027 and DTEK Renewables BV’s “CC” rating with bonds maturing in November 2027.
As previously reported, in 2025, Ukrenergo reduced its net loss by a factor of 3.6—to 10.67 billion UAH—and increased its revenue by 6.5%—to 107.74 billion UAH.
“The main result is approximately $135 million in savings, which will be directed toward restoring power grids damaged by Russian attacks and increasing the resilience of the Ukrainian power system,” – commented First Deputy Prime Minister and Minister of Energy Denys Shmyhal on the restructuring, adding that the burden on Ukrenergo’s electricity transmission tariff will also be minimized.
