(Reuters) – S&P Global said on Friday it considers it a “virtual certainty” that Ukraine will default on its external commercial obligations and cut the country’s long-term foreign currency (FC) credit rating deeper into junk territory.

The agency cut the FC rating to “CC” from “CCC” and said it expects Ukraine to begin formal discussions on debt restructuring with its private creditors in the short term and complete the process by the middle of this year.

Russia’s invasion of Ukraine in February 2022 started the deadliest war on European soil in more than 70 years.

“Given the substantial damage to physical and human capital, Ukraine’s medium-term economic outlook is subject to a high degree of uncertainty,” S&P said in its report.

The agency said its outlook on Ukraine’s FC rating was negative.