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29 June 2022, 11:59

Minister explains Belarus' decision to service Eurobonds in Belarusian rubles

Yuri Seliverstov. An archive photo
Yuri Seliverstov. An archive photo

MINSK, 29 June (BelTA) – Belarus' Finance Minister Yuri Seliverstov explained why Belarus decided to handle payments on Eurobonds in Belarusian rubles as he talked to journalists on 29 June, BelTA has learned.

“We are already fulfilling part of our debt obligations in Belarusian rubles following the decision of the government and the National Bank. We transfer money to the designated account, and our partners can withdraw this money if they want to. A resolution has been adopted to make London-based Citibank our Eurobonds agent,” Yuri Seliverstov said.

The minister explained the reason for this decision. Belarus made the last interest payment on Eurobonds at the end of February. Back then the Finance Ministry credited the full amount in U.S. dollars to the account of the paying agent - Citibank. The bank must transfer this money to international clearing systems and they, in turn, must forward it to the holders. However, the Finance Ministry began to receive numerous complains from securities owners about non-receipt or incomplete receipt of payments due. “These are investors from Belarus, Russia and, perhaps, someone else, because we do not know who the end investor is, as they work with paying agents like banks and depository systems,” the minister added.

The Finance Ministry undertook attempts to find out why investors did not get their money in full. “When we asked why investors did not receive payments due, we got an official answer from the bank saying that everything was transferred. The bank suggested that we contact the depository systems. And these depository systems said they would not discuss this matter with us and told us to settle this issue with the paying agent. The whole situation makes us believe that these depository systems are trying not to deal with those who, from their point of view, are under sanctions - in fact, those who were serviced by Russian depositories, these are Belarusian banks,” Yuri Seliverstov said. More than that, international clearing systems amend their documents and regulations, freeing themselves from any liability and responsibility citing the sanctions as the reason.

The minister pointed to a number of risks arising from this situation. “Firstly, it is likely that a significant part of the money will not reach friendly investors - according to our estimates, the figure in question is about 40%. The money will simply get blocked at some point. And the second thing is that we pay through the National Bank that also came under restrictions. Thus there is a risk that the entire amount of the payment will not reach the destination. Under these conditions, unfortunately, it makes no sense to make usual payments on Eurobonds. Why should we do this if we do not know how things will turn out?” Yuri Seliverstov asked.

Therefore, it is necessary to change the payment mechanism. The new procedure provides for the transfer by the Finance Ministry of payments on Eurobonds in Belarusian rubles to designated accounts in Belarusbank. The access to this money is granted to the paying agent specified in the issuance documentation - Citibank.

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