OREANDA-NEWS. Fitch Ratings has downgraded 12 Ukrainian companies' ratings, following the agency's rating action on the Ukrainian sovereign (see 'Fitch Downgrades Ukraine to CCC'; dated 7 February 2014 on www.fitchratings.com.

The agency downgraded Ukraine's Long term foreign currency Issuer Default Rating (IDR) to 'CCC' from 'B-' and affirmed the local currency IDR at 'B-' Outlook Negative and the Short-term foreign currency IDR to 'C' from 'B'. Ukraine's Country Ceiling was downgraded to 'CCC' from 'B-'.

The corporate rating actions reflect the increased uncertainty regarding the political and economic situation in the Ukraine which may ultimately threaten companies' ability to meet both their foreign and local currency obligations.

In line with Fitch's criteria 'Rating Non-Financial Corporates above the Country Ceiling', the Long-Term foreign currency IDRs of the companies listed below, if they were previously higher, have been downgraded to 'CCC' in line with the Ukrainian Country Ceiling. Due to the imposition of limited capital controls and the recent depreciation of the hryvna, we see the immediate threat to companies' foreign currency borrowings as higher than that to their local currency debt.

However, we believe the likelihood of default on local currency obligations has also increased. This reflects the higher level of political and economic uncertainty, plus cross-default provisions between local and foreign currency debt which, where present, are a particular concern at this rating level. Therefore, if they were previously higher, the companies' Long-Term local currency IDRs and senior unsecured debt ratings have been downgraded to one notch above their foreign currency equivalents, to 'B-'.

Fitch expects to publish a further rating action commentary in the near future summarising non-financial corporate Ukrainian National Scale ratings.

The rating actions are as follows:

Avangardco Investmente Public Limited

Long-term foreign currency IDR downgraded to 'CCC'; from 'B-'. The rating remains constrained by Ukraine's Country Ceiling of 'CCC'

Long-term local currency IDR: downgraded to 'B-' from 'B'; Outlook Negative

Foreign currency senior unsecured rating: downgraded to 'CCC' from 'B-'; Recovery Rating of 'RR4'