Standard & Poor’s assigns B+ credit rating to Belarus’ future Eurobond issue

Standard & Poor’s Ratings Services has assigned its “B+” long-term senior unsecured debt rating to the proposed US dollar notes that will be issued by the Republic of Belarus.

The amount and interest rate as well as other details of the bonds are still to be determined.

At the same time, Standard & Poor’s assigned a recovery rating of “4” to the proposed bonds. “A recovery rating ‘4’ indicates our expectation of a 30%-50% recovery in the event of a payment default. According to our criteria, bonds with a ‘4’ recovery rating are rated on par with the issuer credit rating. We have therefore equalized the rating on Belarus’ upcoming bond with the ‘B+’ foreign currency sovereign credit rating”, - notes the press release.

The ratings are underpinned by moderate government deficits that withstood the economic slowdown comparatively well, and by moderate, albeit rising levels of government debt.

According to resolution No. 1542 of the Council of Ministers the Belarusian government entrusted the Finance Ministry with issuing up to $1 billion worth of long-term public bonds in Q4 2010-2011 abroad, with the maturity period of at least five years.

In July 2010 Belarus accomplished its maiden floatation of $600 million worth of Eurobonds to be redeemed in 2015, with the coupon rate at 8.75%. In August Belarus increased its maiden floatation by $400 million. The redemption yield was set at 8.251%, reducing the weighted average profitability of the $1 billion five-year loan to 8.7%.

According to