Belarus issued 600 million dollars Eurobonds with yield of 9% for five years. Joint organizers of Eurobonds placement are four foreign banks: BNP Paribas, Deutsche Bank AG, The Royal Bank of Scotland plc and Sberbank of Russia. It was stated by Finance Minister of Belarus, Andrei Kharkovets.
According to him, the cost of one coupon is 8.75. The securities priced at 99.011 cents on the dollar. Eurobonds were bought by investors from different regions: Europe, Asia, South and North America, Israel, PRIME-TASS informs.
Moreover, in the preliminary long-term rating, Standard & Poor’s (S & P) international rating agency assigned Belarusian Eurobonds issue senior unsecured debt rating of «B +», BelaPAN informs.
In this rating «B» means «greater vulnerability in the presence of unfavourable business, financial and economic conditions, but at present there is a possibility to fulfil debt obligations in time and in full». The «plus» or «minus» marks intermediate rating categories with respect to main categories.
S & P also assessed the planned issue in recovery rating giving four points. It means that the agency believes that the probability of bond issuer restoration in case of default is equal to 30-50%.
These rating figures were assigned by the agency basing on assessment of weak and deteriorating rates of liquidity, high values of the current account deficit and permanent problems in harmonization of prices of energy imported from Russia, reads the statement of S&P.
As Telegraf previously reported, the government of Belarus was allowed to issue Eurobonds in 2010-2011 up to two billion dollars with circulation period of not less than five years and placing them outside the country. This decision was made by Alexander Lukashenko’s decree № 245 «On the issue of government bonds of the Republic of Belarus» dated May 13
Eurobonds — bonds issued in currency, which is foreign to the issuer, placed with the assistant of international syndicate of underwriters among foreign investors, for whom the currency is foreign as a rule.
In general, the debtors, who issue Eurobonds, are governments, corporations, international organizations interested in obtaining funds for long term (from 7 to 40 years).
Eurobonds are placed by investment and commercial banks. They are one of the securest financial tools. Therefore, their main buyers are institutional investors: insurance and pension funds, investment companies.
Based on The Wall Street Journal materials