Moody’s announces Belarusian default on Eurobonds – Delo.ua
The international rating agency Moody’s attitude to the power of the appearance of Belarus in attracting rubles as a default. This is stated in about agency.
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We remind you that on June 28, the Council visited and the National Bank of Belarus proposed a joint decision on transferring to the Ministry of Finance within the framework of payment on Eurobonds from funds in foreign currency, summed up in Belarusian rubles, specially opened accounts in Belarusbank.
June 29 Ministry of Finance of the country informedthat payments on Belarus-2027 bonds with a term of exactly that day and in the total amount of $22.9 million have already been made according to the new procedure.
In turn, Citibank and Citigroup Global Markets Europe on July 7 announced the suspension of their work as a registrar, financial, payment and transfer agent for Belarusian Eurobonds.
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On the same day, Fitch downgraded Belarus’ long-term foreign currency issuer default rating to ‘C’ from ‘CCC’ as the domestic currency payment includes bond documentation that does not allow settlement in alternative currencies.
The agency also warned that if payments on the Belarus-27 Eurobonds are not made in accordance with the original terms by July 13, then Fitch will consider this a default and will downgrade the economic rating of Belarus to RD (limited default), and the rating of this Eurobond issue to “D”.
At the same time, as of the end of the day on July 14, on the website of this agency, any changes in the ratings of Belarus after July 7 are not valid. In turn, we emphasize that the above-mentioned agency Moody’s, unlike Fitch and Standard & Poor’s (S&P), is not subject to selection by the rating agency of Belarus.
July 12 Ministry of Finance of Belarus declaredthat the situation is force majeure and forced to choose alternative options for fulfilling obligations on Belarus Eurobonds, Fitch’s actions show a “subjective approach in assessing creditworthiness.”
10-year bonds for $600 million with a yield of 7.625% per annum Belarus in June 2017. Later, this country also received 5-year bonds for $800 at 7,125% per annum with a return in the near future of 2023. The organizers of the issues were Citigroup Global Markets and Raiffeisen Bank International.
In total, five Eurobonds worth $3.25 billion are currently being issued. The latest bonds were issued in June 2020 for 5 years for $500 million at 6.125% and for 10 years for $750 million at 6.375%.