VTB Capital, Sberbank CIB to organize Belarusian Eurobonds issue - MinFin
MINSK. Nov 23 (Interfax) - VTB Capital and Sberbank CIB will organize an issue of Belarusian Eurobonds, the Belarusian Finance Ministry reported.
The two financial institutes will also organize the road show for these bonds, which will be held on November 27-30 in Hong Kong and Singapore.
Finance Minister Andrei Kharkovets, Economics Minister Nikolai Snopkov, First Deputy Chairman of the National Bank Yury Alimov and Sergei Rumas, CEO of the Development Bank and a former deputy prime minister, will take part in the road show.
The Belarusian Finance Ministry yield guidance for the Eurobonds will be around 9% per annum, a source on the financial market told Interfax.
"The Belarusian Finance Ministry said it would be guided by the cost of previous borrowing, so that is around 9%," the source said.
The ministry refused to comment on yield guidance or terms.
"Investor interest in the Belarusian bonds will depend on their prices and probably it will start from 9%," the source said. "The valuation of Belarusian risks has toughened up somewhat recently because the country returned to a foreign trade deficit and because of statements from Russian officials about $1.5 billion in export duties on petroleum products, which, Moscow believes, Minsk failed to pay," he said. However, in favour of investor interest in Belarusian bonds is the "flawless credit history Belarus has and surplus liquidity the international capital market has for now." Therefore the placement is likely to take place soon, he said.
Commenting on holding the road show in the Asian region, the source said: "China is a friendly country to Belarus, in contrast to Europe, which is in political confrontation with Minsk."
Finance Minister Kharkovets said in September that Belarus could place $500 million - $600 million in Eurobonds in 2013 in Europe or the Asian region. "For now we plan to work in Europe and the Asian region. The optimum amount of borrowing is $500 million - $600 million, this is a standard amount, the practice is not usually to borrow less than that," he said.
The Belarusian Ambassador to China Viktor Burya said in July that Belarus planned to place sovereign bonds on the Chinese stock markets. "We have talked about this [the issue of sovereign bonds] with mainland China and Hong Kong. There are reliable companies that are willing to assist us," Burya said.
Prime Minister Mikhail Myasnikovich and Kharkovets on November 16 confirmed plans to place $500 million to $600 million in Eurobonds in early 2013. Earlier Kharkovets said a road show would be held in November.
Belarus placed $600 million in debut five-year Eurobonds at 8.75% pa on the European market in July 2010 and another tranche of $400 million at 8.25% in August that year. The country placed $800 million in seven-year bonds at 8.95% in January 2011. The placement organizers were Sberbank , BNP Paribas, RBS and Deutsche Bank. BNP Paribas, RBS and Deutsche Bank have refused to work with Belarus for political reasons.
Belarusian foreign debt payments are due to peak in 2013, when the country is due to repay creditors just under $3 billion. Finance Minister Kharkovets has said Belarus intends to refinance around half of this.