AKPA assessed Belarus’ mechanisms for payments on Eurobonds to Russian investors

Analytical Credit Rating Agency (AKPA) reportedthat some of the payment mechanisms for Eurobonds proposed by Belarus are unenforceable and do not comply with the issuance documentation. At the same time, the agency did not revise the credit rating of Belarus.

AKPA confirmed the long-term credit rating of Belarus at B+ with an evolving outlook. The country’s bonds are rated at BBB- on the national scale and B+ on the international scale. This rating takes into account “uncertainty regarding the stability of the country’s economy.”

In September, Belarus offered three options for fulfilling obligations on its securities: exchanging Eurobonds for local securities, repurchasing at a price of 30% of the face value, or receiving payments in Belarusian rubles through foreign depositories.

According to AKPA, the exchange of Eurobonds for domestic bonds is difficult due to the lack of official relationships with the paying agent and foreign depositories. The second method, the agency believes, is not equivalent to the conditions for issuing bonds. Transferring payments through foreign depositories, according to the agency, narrows the circle of investors who can receive them.

Russian investors who purchased Belarusian Eurobonds cannot receive payments on them after July 2022 due to the introduction of sanctions. On July 7, 2022, Citigroup Global Markets Europe AG and Citibank London, acting as registrar, finance, payment and transfer agent, announced that they would cease to carry out these transactions in relation to Belarusian Eurobonds. How reported According to Kommersant, Russian investors were unable to receive up to $500 million in payments in a timely manner.

Lusine Balasyan