6 Sep 2010 16:17

Belarus to finance 2011 budget deficit with loans from China, Eurobonds

MINSK. Sept 6 (Interfax) - Belarus plans to finance the budget deficit in 2011 using budget funds carried over from the current year as well as borrowing on the domestic and foreign markets, Deputy Finance Minister Andrei Kharkovets told journalists in Minsk on Monday.

The financing will include a targeted loan from China and placement of Eurobonds, he said.

"As for the foreign sources for financing the 2011 budget deficit, plans are to raise targeted loans from China for investment projects. We have already submitted 13 projects to the Chinese side. The projects were approved by the government finance commission. We plan to bring out Eurobonds, if needed. The legal framework for that has already been created," Kharkovets said, recalling that a presidential decree authorized the government to issue up to $2 billion in Eurobonds in 2010-2011.

It was reported earlier that Belarus placed $600 million in five-year Eurobonds on July 26. The coupon was set at 8.75% annually. The bonds were placed at 99.011% of par. The issue was organized by BNP Paribas, Deutsche Bank, Royal Bank of Scotland and Sberbank Russia . Belarus placed a further $400 million of the Eurobonds in August, at a yield of 8.251%. The bonds were placed at 102% of par.

The 2011 budget deficit is projected to total 6 trillion Belarusian rubles (Br) or 3% of GDP, based on revenue of 54.5 trillion Br and spending of 60.5 trillion Br.

The official exchange rate on September 6 was 3,015 Br/$1.