Default is imminent: Fitch has lowered the rating of Belarus due to the payment of currency debt in rubles 

Lukashenko

The international rating agency Fitch Ratings lowered the long-term issuer default rating (RDE) of Belarus in foreign currency from “CCC” to “C” (“imminent default”).

At the same time, the agency’s press release notes that the decision to lower the rating reflects the decision of the Belarusian authorities to make payments for Eurobonds in US dollars in local rubles.

“The first local currency payment for the 2027 US dollar interest payments on Eurobonds was made as part of this process on June 29, the day of the announcement. This is contrary to the bond documentation, which does not allow for settlements in alternative currencies,” the statement said.

Fitch clarifies that if payments are not made in dollars by the end of the grace period, this will be treated as a default.

“If payments on the 2027 Eurobonds to meet initial conditions are not made by the end of the grace period on July 13, Fitch will consider it a default and downgrade the IDR to ‘RD’ (restricted default) and the debt issue rating to ‘D,'” it said. Fitch reports.

As reported earlier, the authorities of Belarus stated that the country will fulfill its debt obligations regarding Eurobonds in Belarusian rubles due to the impossibility of making payments in foreign currency due to Western sanctions. Russia made a similar decision before this.

There are currently 5 issues of Belarusian Eurobonds in circulation for a total of $3.25 billion. The last time Belarus entered the Eurobond market was in June 2020, when it placed 5-year Eurobonds for $500 million at 6.125% and 10-year Eurobonds for $750 million at 6.375%. The placement was organized by Citi, Societe Generale, Raiffeisen Bank and Renaissance Capital. In the structure of the investor base, more than 50% were US residents. Джерело: https://biz.censor.net/n3352970

(C)CENSOR.NET 2022

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