Moody’s Downgraded Belarus’ Credit Rating
International rating agency Moody’s has downgraded the Belarus issuer’s long-term credit status in domestic and foreign currencies from Ca to C, signifying a state of default and very low chances of repayment. In addition, it downgraded the country’s senior unsecured debt rating – also from Ca to C. The agency reported this on its website. on Friday, June 2nd.
According to Moody’s analysts, due to participation in the war in Ukraine and the international sanctions imposed in connection with this, Belarus will face long-term tangible economic damage, which Russia will be able to compensate only in part.
Belarus’ inability to pay debts on Eurobonds
At the same time, Belarus will remain unable to pay its Eurobond debts. In July 2022, Moody’s called this situation a default on external debt obligations. On July 13, 2022, the period during which Belarus had to pay $22.9 million in Eurobonds Belarus-27 expired. However, the Ministry of Finance of Belarus carried out this payment in the national currency – Belarusian rubles, and therefore the bondholders could not receive the payments due to them.
“Because of the war against Ukraine and sanctions, Belarus will not be able to pay its debts in Eurobonds, even taking into account its attempts to pay them in the national currency, which is unacceptable. The expected losses of holders of these bonds will exceed 65%. At the same time, Russia will not be able to fully save Belarus from a very high risk of default on current and future debt issues,” Moody’s said in a June 2, 2023 report.
The negative factors that influenced the current situation, the agency called the intervention of the authorities in the economy, the closed nature of the financial system, the limited reliability of government institutions, as well as the ineffectiveness of local politics and geopolitical turmoil.
Source: DW
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