MOSCOW (Pakistan Point News / Sputnik - 19th July, 2022) Fitch Ratings has downgraded the long-term foreign-currency (LTFC) issuer default rating (IDR) of Belarus to "RD" (restricted default), after Minsk decided to service its US dollar-denominated Eurobond debt in the national Currency.
Earlier this month, Fitch downgraded the rating of Belarus from "CCC" to "C" and said that if no Dollar payment on the sovereign debt is made by July 13 it will consider this a default.
"Following expiry of the 14-day grace period on the 2027 Eurobond coupon payment, on 13 July 2022, we have downgraded Belarus's LTFC IDR to 'RD' and the affected security to 'D', both from 'C'," Fitch said on Monday.
The rating agency added that it also downgraded Belarus's 2027 foreign-currency issue rating to "D" (from "C"), but affirmed the other four foreign-currency issue ratings at "C."
"The downgrade applies only to the government's long-term external debt obligations. We have affirmed Belarus's Long-Term Local-Currency IDR at 'CCC', as the government has continued to service local-currency debt and we do not view the default risk on this debt has materially changed since our previous review on 7 July 2022. We have also affirmed Belarus's Short-Term IDRs at 'C' and the Country Ceiling at 'B-'," Fitch specified.
Last week, The Belarusian Finance Ministry accused Fitch of a biased approach in the issuing of credit ratings and emphasized that it was forced to seek alternative options for repaying the debt after Citigroup Global Markets Europe and Citibank London Branch suspended their services to Belarus as a registrar, fiscal, paying and transfer agent, allegedly due to sanctions.
