S&P downgrades Ukraine and fears default amid fatal protests

|By:, SA News Editor

S&P has cut Ukraine to CCC from CCC+ and kept the country's outlook at negative, saying that it is likely that the government will default.

S&P's move has come after a week of violent anti-government protests has left almost 80 people dead and prompted the EU to impose sanctions.

The deteriorating political situation "puts the government's capability to meet debt service at increasing risk," S&P says.

The EU has been trying to broker a settlement that could involve early elections and constitutional changes, while President Viktor Yanukovych is under increasing pressure to quit.

Ukraine, which is a key energy route between east and west, has become the center of a battle for influence between the EU and Russia.

The protests originally started late last year after Ukraine withdrew from a partnership deal with the EU and took a financial bailout from Moscow instead.

ETFs: GUR, ESR