Ratings firm Standard & Poor's cut Ukraine's credit rating by one notch Friday due to its intentions to restructure its foreign debt.

"We would classify... restructuring of Ukraine's foreign currency debt as tantamount to default," the agency said. "We are lowering our long-term foreign currency ratings on Ukraine to CC from CCC-" with the outlook negative.

The Ukrainian government has begun negotiations with creditors for $15 billion (14 billion euros) in debt relief, part of a $40 billion, four-year financial rescue envisioned by the International Monetary Fund.

The Fund has approved a $17.5 billion loan to Ukraine as part of the package in exchange for the government's successful implementation of economic, budget and monetary reforms.

But, the IMF has warned, the breakdown of a fragile ceasefire with pro-Russia rebels in the country's east, the failure to reschedule its debt with private lenders, or domestic political issues could all undermine the plan.