International credit rating agency Fitch Ratings has formally recorded a default on eurobonds issued by JSC Ukrzaliznytsia, with total obligations of around $1 billion. The decision concerns the debt of Ukraine’s largest freight and passenger rail operator, which is currently preparing for another round of debt restructuring.
In the final ten days of January 2026, Fitch downgraded Ukrzaliznytsia’s long-term credit rating to RD (Restricted Default). At the same time, the ratings of its Loan Participation Notes (LPNs) were lowered to D (default). The information was published on the agency’s official website.
Fitch recognized defaults on two eurobond issues on different dates. On January 22, 2026, the agency declared a default on securities totaling $703.2 million, due in 2026. A few days later, on January 27, a default was also recorded on the second issue—bonds worth $351.9 million, maturing in 2028. In total, the defaults relate to debt obligations of nearly $1.06 billion.
In response to the situation, Ukrzaliznytsia has engaged financial and legal advisers to prepare and carry out a restructuring of the debt under both eurobond issues. Fitch notes that the company’s ratings may be revised only after the restructuring is completed and timely debt servicing is restored.
Ukrzaliznytsia’s credit notes were issued through a special-purpose vehicle, Rail Capital Markets Plc, which is used as a technical issuer for placing debt instruments on international capital markets.
The company has two outstanding eurobond issues, maturing in July 2026 and July 2028. Back in December 2022, Ukrzaliznytsia had already restructured these obligations, providing for a two-year deferral of principal repayments and the postponement of coupon payments, which temporarily eased the debt burden.
However, in December 2024, Ukrzaliznytsia again approached bondholders seeking an additional payment deferral, but investors declined to support the proposal. Following the rejection, the company continued servicing its debt and made two coupon payments, the most recent of which took place in July 2025.
In January 2026, Ukrzaliznytsia officially announced the suspension of eurobond servicing, citing the need to preserve liquidity to maintain operational activities. This decision became the formal basis for Fitch’s default determination.
Overall, the agency’s decision reflects a deterioration in Ukrzaliznytsia’s financial position and underscores that the company’s future credit assessment will directly depend on the outcome of negotiations with creditors and the terms of a new debt restructuring.
