VTB's Belarus unit to arrange foreign debt issues

MINSK, Sept 21 - The Belarussian unit of VTB , Russia's second largest bank, aims to soon start arranging debt issues on foreign markets for the Belarus government and large companies, its deputy head said on Friday.

Slavneftebank's Yuri Tsedrik also said that VTB will raise its stake in the bank to 63 percent this month or next, around the same time the Minsk-based unit aims to take on the new role and change its name to VTB .

The prospects of Belarussian debt being raised on foreign markets increased when the ex-Soviet republic gained its first two credit ratings from Moody's and Standard & Poor's last month. VTB by then had begun arranging a rouble-denominated bond for the government.

"Subsequently , all business, including foreign debt issues, will be carried out through unit. We are planning to start with the finance ministry and the ministry for local authorities," Tsedrik said.

"We aim to do a proposal for Minsk city to issue bonds on the Russian market," he told a news conference, without disclosing how big that issue could be.

He said the bank, which had previously specialised in credit for oil and petrochemical companies, has expanded into other sectors and is now working on projects worth $500 million, although $100 million of that is credit for oil refinery Naftan.

VTB bought a 50 percent, plus one share, stake in Slavneftebank in April for $25 million, and is now buying the stake of another Russian investor in the bank, Slavneft-M.

Belarussian petrochemical producer Belneftekhim owns a 16 percent stake and Morski NPZ owns another 4 percent.

"The deal is at its closing stages," Tsedrik said.