Belarus will need to tap the eurobond market not earlier than H2 2020, Belarus Finance Minister Maksim Yermolovich told BelTA.
“The talks in London [during the government delegation visit on 10-11 June] have shown that investors' interest in the Belarusian eurobonds is high. Actually we have made the decision to sell the euro-denominated bonds,” the minister said. He recalled that the head of state signed the decree to approve the $2 billion borrowing program. Thus, the Finance Ministry can tap the eurobond market, carry out preparatory activities, choose banks-organizers and place bonds.
“We are planning bond sales not earlier than H2 2020 or early 2021,” the minister said.
Maksim Yermolovich recalled that this year Belarus was planning to repay external commitments with the help of the loan of the Russian government ($600 million), the tranche of the Eurasian Fund for Stabilization and Development ($200 million) and the budget surplus ($700 million), and through borrowings on the domestic market.
“This, in principle, would have been enough to honor the obligations. In addition we are planning to raise $150 million in Russian bond market. But, as turned out, there are some difficulties with the Russian $600 million loan. The decision on the $200 million loan from the EFSD has been delayed for some reason too, although Belarus has fulfilled all requirements,” the minister said.
This is why the government has started exploring alternative ways of borrowing. The ministry has already raised $500 million in the domestic market through bonds denominated in US dollars and euros. The Finance Ministry also plans to replace part of Russian resources with the Chinese ones. A preliminary agreement has been reached with China Development Bank to raise 3.5 billion yuans (approximately $500 million in equivalent).
Belarus' Finance Ministry continues to work on the placement of sovereign bonds in the Russian market. “We are technically ready. We have the two-year borrowing program. This year we are planning to float approximately RUB10 billion,” Maksim Yermolovich said.
With regard to the budget surplus, it is as big as planned and will be used to repay the debts.
“We will make up for the resources that turned out inaccessible. We have developed an action plan to raise funds on the Chinese, Russian, and domestic markets. All preparatory events have been almost completed. If the decision on the EFSD tranche is positive and we progress in the talks with the Russian government, we will get $200 and $600 million. We are not giving up our plans to work with Chinese investors, in the Russian domestic market. Thus, we will secure financing for 2020 as well,” Maksim Yermolovich said.
“This debt strategy enables us to honor our foreign commitments and gives confidence to foreign lenders that the Finance Ministry has a clear-cut borrowing program,” the minister said.
