Page 25 - BELRptMar19

6.1.2 Budget dynamics - funding, privatization
Belarus tapped the international debt market on February 21 for the first time this year with a new $600mn issue of 12-year Eurobond with 6.2% coupon following January's drop in the nation's foreign exchange reserves by $838mn, or 11.5% month-on-month, to $6.477bn.
The Finance Ministry of Belarus hopes to borrow $1bn in international capital markets annually , First Deputy Finance Minister Maksim Yermolovich said. “We will have to refinance the debt of about $1bn annually. The focused efforts to build relationships and to gain access to the international borrowing markets led to positive results. Belarus has gained a guaranteed access to the markets of Europe, the United States and Russia. China will be on this list soon. The Finance Ministry plans to achieve an annual budget surplus of $400 to $700mn in the midterm in order to repay the national debt.
In 2018, Belarus will pay about $3.8bn of debt . Maksim Yermolovich stated that much is done in the country to keep the level of the public debt below 45% of GDP. In 2017, the Finance Ministry implemented an ambitious loan program, including $1.4bn earned from floating Eurobonds, as a result, the national debt increased by $3bn, which created a reserve for the unconditional fulfillment of obligations in 2018. By the end of 2017, Belarus' foreign currency reserves amounted to $7.3bn.
Cash-strapped Belarus is going to borrow $700mn via Eurobonds in foreign markets by the end of the year with the aim to be able to repay its debts.
"As much as $800mn is expected to be provided for repaying the principal from sources other than borrowing," BelaPAN news agency quoted Mikhail Prishcheta, a departmental head at the nation's Finance Ministry, as saying on February 12. "As much as $600mn more will come in the form of a Russian government loan, which is provided for by Russia’s 2019 budget."
The foreign exchange reserves of Belarus decreased by $139.9mn, or 2% month-on-month, to $7bn in January.
Prishcheta added that possibility of selling bonds in the Russian and Chinese markets "is under consideration". The official also warned that Belarus would not borrow money on unfavourable terms and would evaluate the situation before deciding to sell its bonds.
According to the central bank's monetary policy guidelines, the volume of international reserve assets by early 2020 should be at least $7.1bn.
Belarus is going to raise $2bn via Eurobond placements in 2019-2020, according to a special decree inked by the nation's President Alexander Lukashenko in November.
Belarus tapped the international debt market in February for the first time this year with a new $600mn issue of 12-year Eurobonds with 6.2% coupon, following January's drop in the nation's foreign exchange reserves by 11.5% month-on-month, to $6.477bn.
According to officials in Minsk, the country also expects to receive $1bn from Russia as an inter-governmental loan soon.
In October, the Russia-led Eurasian Fund for Stabilisation and Development (EFSD) allocated a $200mn support tranche to Belarus from the lender's $2bn loan agreed with Minsk in 2016. The EFSD's move seems to be purely political, as Belarus has failed to meet benchmarks in five out of 25 indicators (including three control indicators) by the initial deadline of October 1, 2017.
25 BELARUS Country Report March 2019 www.intellinews.com