Rating firm Moody’s has declared Belarus in default on its external debt bonds. The firm announced it in its official message.
On July 13, the era of grace expired, which the country had to pay $22. 9 million in Eurobonds Belarus-27. The Belarusian Ministry of Finance made this payment in the national currency, which prevented bondholders from receiving the payments.
“The payment of the external debt in Belarusian rubles is a default,” the agency said.
What happened?
Recall that at the end of June, Finance Minister Yuri Seliverstau said that in February Belarus had paid a dollar coupon for Eurobonds maturing in 2027. However, later, the Finance Department won calls from bondholders complaining that the budget was meeting them. Although the budget was transferred to the payment agent Citibank N. A (which later refused to transact with Belarusian Eurobonds in general), allegedly due to Western sanctions.
Foreign rating firm Fitch has lowered the long-term IDR in Belarusian currencies from CCC to C before default, meaning the initiation of a default or a procedure similar to a default, or that of the issuer. This was the firm’s reaction to the resolution of the Belarusian government and the Ministry of Finance to meet obligations under Eurobonds in Belarusian rubles.