Belarus redeems $800 mln of 2023 bonds in local currency - MinFin
MINSK. Feb 28 (Interfax) - Belarus has redeemed $800 million of Belarus-2023 bonds in Belarusian rubles, the Finance Ministry said.
"On February 28, 2023, the equivalent of $800 million of Republic of Belarus Eurobonds, Belarus-2023, were redeemed and the equivalent of $27.5 million interest on Belarus-2023 bonds and $18.6 million on Belarus-203o bonds was paid. The funds were all credited to a separate bank account opened with Belarusbank," the ministry said in a statement posted on its website.
The procedure for honoring Eurobond obligations in Belarusian rubles was approved by a joint resolution of the government and the National Bank in April 2022, the ministry said.
"This procedure for fulfilling obligations under Eurobonds is being applied due to the current sanctions restrictions, including in relation to the National Bank as financial agent of the government of the Republic of Belarus, as well as the inability of the Western payment infrastructure to ensure, under sanctions, that payments will reach all Eurobond holders," it said.
The ministry also said holders of Eurobonds can receive payments on Eurobonds in the national currency from the account in Belarusbank by submitting the relevant application and completing a verification process.
The Finance Ministry has made coupon payments on bonds in local currency since June 2022, saying that access to these funds had been provided for Citibank, which the Belarusian authorities continue to consider the payment agent, although on July 7 the bank said that it would no longer act as payment agent on Belarusian Eurobonds. The ministry said the payment agent has not sought to claim the funds.
First Deputy Finance Minister Dmitry Kiyko said at the beginning of January that Belarus would redeem $800 million of Belarus-2023 bonds in Belarusian rubles in February,
Belarus at the end of June 2017 placed $800 million of five-year bonds maturing in February 2023 at a yield of 7.125% and $600 million of ten-year bonds at a yield of 7.625%. The organizers of the deal were Citi and Raiffeisen Bank International, and the co-organizer without underwriting responsibilities was the Development Bank of Belarus.
Investors from the United States bought up 67% of the total, investors from the UK bought 24% and investors from continental Europe bought 9%, according to Finance Ministry data.
Both issues were placed in the 144A/Reg S format under English law and are listed on the Irish Stock Exchange. They are recorded by and settlements conducted via Euroclear, Clearstream and Depository Trust Company.
The ministry said in early December that it had transferred payments on Eurobonds in Belarusian rubles to bondholders from Russia, Armenia and Belarus in line with their requests.
Following the Belarus-2023 redemption, Belarus has four outstanding Eurobond issues totaling $2.45 billion. The country last entered the Eurobond market in June 2020, when it placed five-year bonds totaling $500 million at 6.125% and 10-year bonds totaling $750 million at 6.375%. U.S. residents made up more than 50% of the investors in the bonds.
S&P Global Ratings and Fitch Ratings downgraded the ratings of all Belarusian Eurobond issues to "D" (default), and the country's sovereign foreign currency credit ratings to "SD" (selective default) and "RD" (restricted default), respectively, after Belarus decided in late June to pay the coupons on U.S. dollar-denominated Eurobonds in Belarusian rubles.