Fitch Ratings has restored the long-term issuer default rating of state-owned Ukrainian energy company Naftogaz to CC following the completion of its Eurobond debt restructuring. The agency had briefly downgraded the company's rating to restricted default, or RD, before restoring it to CC once the bond modification process was finalized.
The restructuring covered bond issues valued at $0.6 billion and €0.7 billion released through Kondor Finance, with debt repayments pushed back to 2032 and 2033. Fitch evaluated the modification as a distressed debt exchange, indicating terms that were less favorable to creditors, but noted that the arrangement enabled Naftogaz to avoid a probable default.
Fitch reported that Naftogaz remains at the CC level due to weak liquidity, high operational risks, and uncertainty regarding its capacity to meet debt payments on schedule. Operations have been complicated by Russian missile and drone attacks against Ukrainian gas infrastructure, forcing the company to expand its natural gas imports substantially.
Debt obligations and upcoming payments
A key vulnerability highlighted by Fitch involves a €94 million debt installment due in 2027 on the euro portion of the company's Eurobonds. The agency stated that the timeliness of this repayment remains uncertain because of ongoing operational difficulties.
Naftogaz has also increased its reliance on bank borrowings, which climbed to 175 billion hryvnias by the end of 2025 from 106 billion hryvnias a year earlier. Fitch reported that this expansion was largely driven by credit facilities provided by the European Bank for Reconstruction and Development and the European Investment Bank.
Credit support and industry context
Despite these pressures, Fitch noted that extending Eurobond maturity dates acts as a positive factor for the corporate credit profile. State-owned Naftogaz remains the largest gas production entity in Ukraine, and ongoing government support contributed to preserving its rating.
National Joint Stock Company Naftogaz of Ukraine is the country's state oil and gas enterprise, overseeing domestic extraction, processing, and grid distribution. Fitch Ratings uses the CC designation to signal substantial credit risk, indicating that default remains a very real possibility.
The rating update for Naftogaz comes alongside broader credit evaluations for major corporate entities in Ukraine. In May 2026, Fitch downgraded the rating of Vodafone Ukraine due to refinancing risks surrounding $280 million in Eurobonds due for repayment.
