Page 23 - BELRptOct18

6.1.2 Budget dynamics - funding, privatization
The Belarusian government is going to borrow up to $2bn on Chinese, Russian markets after 2019 , while the nation is not gong to cooperate with the International Monetary Fund (IMF) due to the fact that the country's authoritarian President Alexander Lukashenko seeks to avoid "a shock for residents". "We are preparing to place sovereign bonds on local markets. These are the markets of China and Russia. We hope that we will be able to borrow a total of up to $2bn on Chinese and Russian markets," Yermolovich said in a televised interview on September 9. Belarus tapped the international debt market in February 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. Yermolovich added that Lukashenko said earlier that a new reform programme with the IMF, "will be a shock for our residents and this cannot be done". "This is why, the government has refused an IMF programme," the minister said.
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.
Belarus is getting ready to issue a $500mn so-called Panda bond on the Chinese market. Chinese rating agency China Chengxin International Credit Rating (CCXI) has assigned Belarus with AA+ national scale sovereign credit rating with a stable outlook, and BBg global scale sovereign rating, the Finance Ministry in Minsk said in a statement on September 3. "The credit rating is obtained as a part of preparation for issuing government bonds of Belarus on the domestic market of China," the statement reads. Belarus is still considering possible placement of $500mn bonds on the Chinese market . The funding will help Minsk to support the level of its foreign reserves amid a new financial and trade conflict with Russia.
23 BELARUS Country Report October 2018 www.intellinews.com