Standard & Poor's Ratings Services lowered its credit rating for Ukraine, saying the nation could face an "inevitable" default in the coming months if it doesn't receive funds necessary to meet obligations.
The firm now rates Ukraine's credit at triple-C-minus, down from its prior rating of triple-C and already well into junk territory. The outlook is negative, S&P added.
The downgrade comes as the International Monetary Fund earlier Friday praised Ukraine's efforts to reform and stabilize its economy, which is likely to contract by at least 7% this year. The country is suffering from its conflict with pro-Russian separatists backed by Russia.
The IMF has already handed to Ukraine $4.6 billion out of a total $17 billion it had agreed to lend, but the balance has been delayed by a protracted process to form a new government.
"In our view, this delay, coupled with significantly reduced foreign currency official reserves, increases the risk that the Ukrainian government might not be able to meet its obligations," S&P wrote Friday. "A default could become inevitable in the next few months if circumstances do not change; for instance, if additional international financial support is not forthcoming."
Elsewhere, S&P revised its outlook for Slovenia to stable from negative, citing more predictability in the nation's politics after the election of a new government that enjoys a "sizable parliamentary majority and mandate" to stabilize its financial system and public finances.
The firm rates Slovenia's credit at A-, which is four notches into investment-grade territory.