Page 21 - BELRptAug18

The external state debt of Belarus totalled $16.4bn as of June 1, up by $332mn or 2% from early January, according to the Finance Ministry in Minsk.
The result was mainly attributed to a $600mn placement of a 12-year Eurobond with a 6.2% coupon. Belarus also borrowed $377mn from Russian banks and the government.
The government in Minsk also borrowed $33.1mn from Chinese banks; $52.7mn from the International Bank for Reconstruction and Development (IBRD); and $2.1mn from the European Bank for Reconstruction and Development (EBRD) and the Nordic Investment Bank (NIB).
According to official data, the nation's international reserves increased by $43.5mn, or 0.6% m/m to $7bn in April.
Near-term external financing risks have declined due to the pre-financing in 2017 of payments due in 2018 through market and official borrowing, and due to an increase in international reserves.
FX debt service is $2.6bn (not including Eurobond payment) in 2018,
which will be covered by a mix of multilateral financing, local market issuance, use of FX cash buffers and potentially a new international bond issuance. FX liquidity in the local market and FX government revenues derived from custom duties and trade of oil products further mitigate near-term financing risks.
Belarus's gross external financing requirement (current account deficit plus medium- and long-term amortisations) has declined to 101% of international reserves, from a previous peak of 223% in 2014.
Sustained reduction in refinancing risks will depend on continued progress on diversifying external financing sources , refinancing opportunities of Russian bilateral debt and development of the local market. The next Eurobond amortisation is not until 2023.
Who is buying Belarusian eurobonds?
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 bond follows on from last year’s highly successful bond placement. In June 2017, Belarus placed $1.4bn worth of dual-tranche US dollar-denominated Eurobonds with five-year and ten-year maturities. The yield of the five-year tranche raising $800mn was 7.125%, with the ten-year tranche raising $600mn at 7.625%.
Earlier in January this year the government said that it intends to issue approximately $1bn of debt a year. But who is buying the paper, Sberbank CIB asked in a note.
“Data on Belarus's most recent Eurobond placement confirmed that US accounts were the main investors, acquiring 52% of the issue, while investors
21 BELARUS Country Report August 2018 www.intellinews.com