Belarus redeems bonds placed in Russia on schedule
MINSK. Aug 5 (Interfax) - Belarus redeemed two issues of government bonds placed in Russia on Thursday as scheduled.
"On August 3, 2022, simultaneously with the last coupon payment, obligations were fulfilled on the redemption of two issues of government bonds placed on the Russian financial market in 2019, Series 03 and 04 totalling 10.4 billion rubles (including 10 billion rubles repayment of principal debt and 0.4 billion rubles payment of accrued interest)," the Belarusian Finance Ministry reported.
The money was transferred in full to the payment agent, the National Settlement Depository (NSD), on July 28, the ministry said.
"This fact further confirms that in cases where settlement and clearing infrastructure makes it possible to carry out payments and get them to bondholders, the Finance Ministry continues to fulfil obligations through this infrastructure," the ministry said.
The Belarusian government approved a program in 2019 to place bonds on the Russian market that called for raising 30 billion rubles in 2019-2020. Belarus actually placed 20 billion rubles worth of bonds on the Moscow Exchange , including three-year bonds totalling 10 billion rubles at 8.65% in July 2019 and five-year bonds totalling 10 billion rubles at 8.5% in April 2020.
It was reported earlier that Belarus made a payment on its Belarus-2027 Eurobonds in Belarusian rubles at the end of June. The Finance Ministry transferred the money in the national currency to a special account at Belarusbank and asked the payment agent to independently withdraw it from this account and pay investors.
The payment agent and registrar for the Belarusian Eurobonds, Citigroup and Citibank said on July 7 that they would no longer perform these duties. The Finance Ministry responded by saying it was looking for alternative payment agents.
Fitch Ratings downgraded Belarus's long-term foreign currency issuer default rating to RD (restricted default) from C, and the rating for the Belarus-2027 bonds to the default level D because of the country's decision to make payments on the dollar-denominated bonds in rubles.
Moody's said it considers the payment of the Eurobond coupon in rubles to be equivalent to a default, while S&P Global Ratings downgraded Belarus's foreign currency sovereign ratings to SD/SD (selective default) from CC/C and the rating for the Belarus-27 bonds to D (default) from CC.
Prime Minister Roman Golovchenko said that the rating agencies declaring a default on the Belarusian Eurobonds did not mean anything for Minsk, which is prepared to meet its obligations to foreign creditors.