Moody's Investors Service today stated that last week's default by an unrated state-owned company is consistent with the agency's B2 (negative outlook) sovereign credit rating for the government of Ukraine.

The company, Ukraine Rail (Ukrzaliznytsia), defaulted on a principal payment on a Barclays Capital-led syndicated loan on 20 November 2009, and Moody's is responding to questions that were raised about the possible impact on the sovereign's own rating.

The organizer of the loan was the Barclays Capital Bank, Britain.

Moody's noted that Ukrzaliznytsia is current on payments for the Deutsche Bank loan.

The government of Ukraine itself has no major debt payments until March 2010 and a very light foreign currency debt payment schedule for 2010 in comparison to available foreign currency reserves.

As Ukrainian News earlier reported, in early November, Ukrzaliznytsia state rail transport administration started negotiations with creditors on restructuring repayment of a syndicated loan of USD 550 million.

In July 2007, Ukrzaliznytsia took a syndicated loan of USD 550 million to complete construction of a bridge in Kyiv, renew rail infrastructure and buy rolling stock.