2023-11-15 12:16:49
Photo: pixabay.com
The Russian analytical credit rating agency (ACRA) has withdrawn its international scale credit ratings assigned to the government of Belarus. This is reported on the organization’s website. This decision could further reduce the attractiveness of Belarus for investment.
ACRA is revoking, among other things, the long-term credit ratings previously issued to the Belarusian government in foreign and national currencies at B+. Ratings are reportedly being withdrawn for non-analytical reasons.
The ratings were withdrawn against the backdrop of the situation with Minsk paying the principal debt on Eurobonds and interest on them in Belarusian rubles.
Let us recall that in February of this year, the Belarusian authorities announced the payment of the principal debt on the Belarus-2023 Eurobonds and interest on them. The amount of the principal debt in Belarusian rubles amounted to the equivalent of $800 million, and interest – $27.5 million (in rubles). These funds were transferred to a special account in Belarusbank. The Ministry of Finance explained this decision by sanctions from Western countries, due to which it is impossible to transfer payments in foreign currency to Eurobond holders.
At the same time, Belarus is developing a mechanism for settlements on Eurobonds with Russian holders of such securities “bypassing Western infrastructure.” The Ministry of Finance decided to work directly with ten authorized depositories of Russia, and not with Eurobond holders, as was the case before.
“The Belarusian side is thus consistently, in an accessible manner, building its own infrastructure for making payments to Eurobond holders as an alternative to the Western one, which remains incapable (unwilling) to provide settlements on Eurobonds of Belarus,” the Ministry of Finance stated.
The situation with Eurobonds of the Ministry of Finance of Belarus
Since the summer of 2022, the Ministry of Finance of Belarus began paying debts on Eurobonds in Belarusian rubles, and not in the currency that was specified in the loan agreements (usually dollars). The ministry explains this decision by sanctions from Western countries against the National Bank, as well as “the inability of the Western payment infrastructure to ensure, under the conditions of sanctions, payments to all Eurobond holders.”
International rating agencies have several times recorded a default on individual interest payments on loans due to the fact that the Belarusian authorities violated the terms of the agreements and paid in Belarusian rubles, transferring the money to a special account in Belarusbank.
In 2022, the Ministry of Finance announced the early repurchase of Eurobonds at 30% of the par value. It was planned that the redemption amount would not exceed the volume of Eurobonds that were to be repaid in 2023.
Since February 2023, Russian investors have complained that the Ministry of Finance of Belarus does not pay debts on Eurobonds. They contacted the Central Bank of the Russian Federation and wrote a joint letter personally to the Minister of Finance of Belarus Yuri Seliverstov. The total amount of uncollected funds was $500 million at the beginning of March.
One of the Russian investors filed a lawsuit against the Belarusian department due to non-payment of debts. It recently became known that private Russian investors asked to limit Belarus’ access to interstate loans and the Russian capital market due to non-payments on previously issued Eurobonds.
Later it was reported that private Russian investors asked to limit Belarus’ access to interstate loans and the Russian capital market due to non-payments on previously issued Eurobonds, as follows from an appeal addressed to the Deputy Minister of Economic Development of the Russian Federation Dmitry Volvach.
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