Fitch downgrades Belarus's long-term foreign-currency IDR to “C”

Fitch typically does not assign Outlooks to sovereigns with a rating of 'CCC+' or below, the agency reported, as seen by Ukrinform.

The downgrade follows the announcement by the Ministry of Finance on 29 June of a joint resolution by the Council of Ministers and the National Bank of Belarus that payments due in US dollars on Eurobonds will instead be transferred in Belarussian rubles into an account at ASB Belarusbank that could be accessed by the paying agent.

The first payment in local currency for a US dollar interest payment on the 2027 Eurobond was made under this process on 29 June, the day of the announcement.

“This contravenes bond documentation that does not allow for settlement in alternative currencies,” the statement said.

“If payments on the 2027 Eurobond in fulfilment of the original terms are not made by the end of the grace period, 13 July, Fitch would consider this a default and would downgrade the LTFC IDR to 'RD' (Restricted Default) and the affected debt issue to 'D'. The LTFC IDR would only be upgraded from 'RD' once Belarus has normalised its relationship with its international creditors,” Fitch stated.