Ukraine default would cost EBRD and IBRD triple-A credit ratings, Fitch warns

A default by Ukraine on its international development loans would likely cost two of the world's top multilateral lenders, the EBRD and IBRD, their prized triple-A credit ratings Fitch has warned.

Lending to Ukraine by Western supranationals has jumped since Russia's invasion in 2022. It stood at a combined 25 billion euros ($26.8 billion) at the end of last year and is expected to increase significantly again this year as the war rages on.

"Given the size of their net exposure... the negative rating impact would be most significant for EBRD and IBRD, and likely limited to one notch (downgrade) for the two MDBs," Fitch, which currently rates both institutions a top-grade AAA, said in report on Wednesday about the impact of a possible Ukraine default.


The downgrades could be even bigger if lending to Ukraine continued to grow markedly, although in that case, Fitch said it was likely that the two banks' shareholders would provide additional support to alleviate some of the negative impact.