Vodafone Ukraine is a profitable operator with revenue of 13.5 billion hryvnias in just the first half of 2025 and income growth of 15%. However, on July 2, 2025, Fitch Ratings downgraded its long-term issuer default rating from CCC to CCC- — a level on credit scales that precedes actual default. The reason is not financial weakness of the company, but the architecture of wartime restrictions.

What exactly alarmed Fitch

In February 2027, Vodafone Ukraine must repay Eurobonds worth $280.1 million (as of December 2025). The papers with a 9.625% coupon are the result of a restructuring in early 2025, when the operator agreed with holders of 49% of bonds to defer repayment from February 2025 to two years ahead, partially paying $99.88 million with accrued interest.

The problem is not whether Vodafone has money within Ukraine. The problem is that it cannot be legally transferred abroad. National Bank of Ukraine Resolution No. 18 from February 24, 2022 prohibits private companies from making cross-border payments in foreign currency to repay external debt. As Fitch notes, the agency "expects the NBU to continue restricting cross-border payments by private companies in foreign currency to meet external debt obligations".

"We assess that VFU will have sufficient liquidity for operational activities and debt repayment once the NBU provides permission for currency payments."

Fitch Ratings

In other words, Fitch itself recognizes: the company is solvent provided restrictions are lifted. The CCC- rating reflects not bankruptcy, but regulatory uncertainty.

Vodafone is not an exception

Other major Ukrainian issuers have found themselves in a similar trap. Due to the same Resolution No. 18, debt restructuring was conducted by agro-holding Kernel and metallurgical company Metinvest. The systemic problem: the currency exists within the country, but there is no mechanism for its legal transfer to repay external debt — or it is too limited.

The NBU is gradually easing restrictions: in August 2025, Resolution No. 95 expanded the list of permitted currency operations, in particular allowing companies to pay dividends for 2023 within EUR 1 million per month. Vodafone is already accruing dividends to its shareholder — 660 million hryvnias for 2024 — in exactly this mode: separate monthly tranches. But EUR 1 million per month and $280 million in a one-time payment are different orders of magnitude.

What this means for subscribers and the market

For Vodafone's 15.9 million subscribers, nothing changes in the short term: the network operates, investments continue — in just the first half of 2025, the company invested over 3.5 billion hryvnias in infrastructure. But if by February 2027 the NBU does not provide an individual permit or does not liberalize the currency regime for external debts, Vodafone will have three options: new restructuring with creditors, technical default, or asset sales.

• Restructuring — the most likely scenario, but already the second in a row for the same papers.
• Technical default does not mean the operator stops working, but destroys reputation on capital markets.
• Sale or change of ownership — a less realistic option amid war, but not ruled out.

The Vodafone situation is an indicator of a broader problem: Ukrainian companies with normal business metrics carry credit risks due to the architecture of wartime regulation, not due to actual insolvency. This directly inhibits the attraction of new foreign investments — the Finance Ministry itself admits that "attracting foreign investors is complicated by currency restrictions".

The question is not whether Vodafone Ukraine will survive — with such revenue it will survive. The question is whether the NBU will resolve the mechanism of currency payments for systemic issuers by mid-2026 — or each company will continue conducting separate negotiations with creditors, each time signaling to markets regulatory unpredictability.