86.How credit ratings evaluate a credit worthiness of a government?

International credit position of the state, which finds its sovereign credit rating is very important for economic development. On the credit rating oriented investors and creditors in making their decisions - the higher it is, the more confidence in the borrower and the lower the rate at which the owner of the funds ready to lend them. Some experts question the objectivity and independence of these assessments, and some international investors when making decisions rely solely on credit ratings. However, there is no doubt the fact that the credit ratings of states never left unattended international community. Therefore, analysis of the nature of sovereign credit ratings, as well as evaluation of positions Ukraine credit risk and the threat of insolvency is particularly relevant today. The rankings of the country are taken into account two main components: political and economic risks. The first element concerns the willingness of the state to fulfill its debt obligations and stability depends on factors such as the political system, social environment, international relations. Economic risk characterizes a country's ability to fulfill its debt obligations depends on factors such as external financial position, flexibility balance of payments, economic structure and rates of population growth, economic governance and economic prospects. In today's world there are more than a hundred rating agencies involved in the assessment of solvency States, but most market share rating services (90%) is concentrated only in the three leaders of the industry: Standard and Poor's Corporation («S & P»), Moody's Investors Service, Inc . («Moody's») and Fitch Ratings Ltd. («Fitch»). Sovereign credit ratings of these three companies are the main focus for most international investors and creditors wishing to identify the risks of their investments, taking into account the probability of default of a country. According to the methodology of the credit rating of the safest countries in terms of solvency assigned a rating of "AAA" ("AAA"), as the worst financial situation (default) displays the rating «D». Also, the ratings may be added signs "+/-" or digital modification (1, 2, 3). Nashodni Ukraine has a bad credit rating such as CCC + / ССС.

87.What do you know about Fitch credit rating agency?

Along with Moody's and Standard & Poor's, Fitch is one of the top three credit rating agencies. They hold a collective global market share of roughly 95 % with Fitch having approximately 15%. S&P and Moody's are based in the US, while Fitch is dual-headquartered in New York City and London. The rating system of Fitch Ratings is very similar to S&P's in that they both use a letter system.

Fitch Ratings' long-term credit ratings are assigned on an alphabetic scale from 'AAA' to 'D'.

AAA means- reliable and stable,

AA - quality with a bit higher risk

A - economic situation could affect finance

BBB - middle class-an acceptable risk

BB - more prone to economic changes

CCC - vulnerable, dependent on current economic situation

D - has defaulted before, high risk to again.

Fitch's short-term ratings indicate the potential level of default within a 12-month period.

F1+ : best quality grade, indicating exceptionally strong capacity of obligor to meet its financial commitment; F1- best quality grade; F2- good quality grade ; F3 - fair quality grade; B - of speculative nature; C – with high possibility of default; D - the obligor is in default.

Fitch Solutions offers a range of fixed-income products and professional development services for financial professionals.

There is also Fitch Learning - a financial services training and development firm.

In August 2014 Fitch Ratings has downgraded Ukraine's Long-term local currency Issuer Default Rating (IDR) to 'CCC' from 'B-' and affirmed its Long-term foreign currency IDR at 'CCC'. The downgrade reflects the following factors:

• Ukraine is part-way through a political transition that began in February with protests

• The government has been fighting separatists in the eastern regions of Donetsk and Luhansk beginning in April.

• Instability in the east and disputes with Russia are affecting the economy: GDP is shrinking substantially, Exports to Russia are slowing down,

• Government solvency has deteriorated. The consolidated fiscal deficit, including losses of Naftogaz, is believed to reach 10% of GDP in 2014.

• The reserves position remains fragile and only public foreign-currency borrowing under the IMF programme stands in the way of a renewed external financing crisis and probable default. The hryvnia has depreciated almost twice against the USD since end-2013.