Belarus Will `Undoubtedly' Sell Bonds in U.S., Asia as It Avoids IMF Loans

By Maria Levitov

Belarus plans to test the U.S. and Asian debt markets, as well as selling ruble-denominated bonds, as the government seeks to wean itself off international aid and sustain economic growth.

"We will undoubtedly enter the Asian and the American markets," Finance Minister Andrei Kharkovets said in an interview today in Moscow, declining to comment on the timing of possible sales.

Belarus is selling state-owned companies and Eurobonds to help meet its financing needs after saying it won't seek additional loans from the International Monetary Fund. The IMF agreed to loan Belarus $2.5 billion in December 2008 after export revenue tumbled during the global financial crisis.

The economy is expected to grow 7.2 percent this year and 6.2 percent in 2011 after expanding 0.2 percent last year, according to the IMF. The government had sought to achieve growth of as much as 12 percent this year and keep inflation below 10 percent, Economy Minister Nikolay Snopkov said May 18.

Belarus's plan to sell as much as 15 billion rubles ($497 million) of bonds in November is a "logical step," Kharkovets said today. The government plans to sell ruble-denominated bonds as it seeks "a new platform," Kharkovets said.

"We use the ruble in common trade, so it's a logical step for us. In addition, it's necessary to open this platform for everyone. In this respect, this debut issue is of interest for us and for the Russians."

Moscow-based OAO Sberbank is organizing the first sale of ruble-denominated sovereign bonds by a country other than Russia.

Testing Markets

Belarus may also borrow in other currencies, Kharkovets said.

"We undoubtedly will look at the market, consider it from the point of view of our economy, and will issue in the currency that will be optimal for us from the point of view of efficiency of the deal," he said. "I wouldn't rush. Since we've entered the market, we should test all the platforms."

Belarus' 8.75 percent bonds due 2015 yielded 7.74 percent at 2:45 p.m. in Minsk. The country's debt is rated B1, four levels below investment grade, by Moody's Investors Service and an equivalent B+ by Standard & Poor's, the same level as Bosnia & Herzegovina and Uganda.

"We are absolutely satisfied with how our paper is trading today," Kharkovets said. "We will work further to secure reduction in the price."

Last year, Belarus borrowed $230 million via bridge loan from group of Russian banks because the country "didn't have time" to sell bonds, he said. It has no plans to borrow more from Russian banks, he said.


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