Moody's Declares Belarus In Default

The country's authorities have defaulted on foreign debt obligations.

The international rating agency Moody's declared Belarus in default on foreign debt obligations. The agency announced it in its official message.

On July 13, the grace period expired, during which the country had to pay $22.9 million on Belarus-27 Eurobonds. The Belarusian Ministry of Finance made this payment in the national currency, due to which bondholders were unable to receive payments.

“Foreign debt repayment in Belarusian rubles is a default,” the agency's statement reads.

What did happen?

Recall that at the end of June, Finance Minister Yuri Seliverstau said that in February Belarus paid a coupon in dollars on Eurobonds maturing in 2027. However, later the Ministry of Finance received appeals from bond holders who complained that the funds did not reach them. Although the funds were transferred to the payment agent Citibank N. A (which later refused to perform the operations with Belarusian Eurobonds in general), allegedly due to the Western sanctions.

The international rating agency Fitch has downgraded Belarus's long-term foreign currency IDR from CCC to pre-default C, which means the beginning of a default or a process similar to a default, or the issuer's inaction. This was the agency's reaction to the decision of the Belarusian government and the Ministry of Finance to fulfil obligations under Eurobonds in Belarusian rubles.