Belarus is looking for money in Europe and China

April 22, 2016 18:14

The Belarusian government is studying the possibilities of placing the sovereign Eurobonds and entering the Belarusian issuers on IPO in China and Hong Kong. Against the background of the complexities associated with the attraction of resources of European investors and international financial institutions, Belarus is looking for ways to leverage resources of Asian investors. However, the prospects of attracting the untied resources from the Asian financial markets by the residents of Belarus look unclear so far.

On 10 June, the Ambassador of Belarus to China Victor Burya, said that the Belarusian government may place government bonds in the Asian market. According to him, next week the representatives of the Ministry of Finance and the National Bank of Belarus plan to visit China, where they will meet with the representatives of companies that are in the range of potential organizers of sovereign Eurobonds. Besides, Belarus is conducting negotiations with China on IPO organization of Belarusian companies.

Thus, amid the complexities associated with the attraction of European investors and international financial institutions, Belarus is looking for ways to leverage resources of Asian investors. Leading European banks, such as RBS, BNP Paribas and Deutsche Bank, are not yet ready to resume their cooperation with Belarus on the placement of Eurobonds in the European financial markets. At the same time the German Deutsche Bank has suspended cooperation on IPO organization of the Belarusian Automobile Plant.

In our view, the prospects of attracting of untied resources from the Asian financial markets by the residents of Belarus look unclear at the moment. In terms of cost and length of loan resources, it looks appropriate to attract new loans from the IMF, the World Bank, the European Bank for Reconstruction and Development, etc.

On 13 July, pursuant to its obligations under a reserve credit of the International Monetary Fund, Belarus carried out the second principal debt repayment of $ 64.725 million SDR (equivalent to 97.4 million dollars). The total amount of repayment and servicing of IMF loan in February 2009 - July 2012 amounted to $ 401 million (see Table 1). 

Table 1

Payments of Belarus to repay and service the IMF loan in 2009-2012

Date

Amount of payment,
mln. SDR

Amount of payment, mln. doll.

Type of payment

05.02.2009

0,433

0,648

Interest payments and commissions

06.05.2009

1,916

2,876

Interest payments and commissions

06.08.2009

2,491

3,904

Interest payments and commissions

05.11.2009

3,343

5,327

Interest payments and commissions

04.02.2010

7,156

11,055

Interest payments and commissions

06.05.2010

10,103

15,037

Interest payments and commissions

05.08.2010

12,850

19,678

Interest payments and commissions

04.11.2010

13,240

21,034

Interest payments and commissions

04.02.2011

13,385

20,928

Interest payments and commissions

05.05.2011

13,470

21,853

Interest payments and commissions

04.08.2011

14,520

23,172

Interest payments and commissions

04.11.2011

13,348

21,066

Interest payments and commissions

06.02.2012

12,206

18,861

Interest payments and commissions

13.04.2012

64,725

99,870

Repayment of principal debt

04.05.2012

11,817

18,268

Interest payments and commissions

13.07.2012

64,725

97,400

Repayment of principal debt

In total

259,728

400,977

 

The balance of outstanding principal debt of the IMF loan has declined from 3.484 billion dollars on 1 January 2012 to 3.220 billion dollars on July, 13 (subject to exchange rate fluctuations of SDR against the U.S. dollar). The next interest and commission payments is in August, the payment of principal debt is in October this year.