As noted in the press release, the rating downgrade is due to the end of the 14-day grace period for Eurobonds 2023 and 2030 (expired on September 12), and for Eurobonds 2026 and 2031 (expired on September 7).

Therefore, all Eurobonds of Belarus in circulation now have a "D" rating.

In addition, Fitch Ratings notes, the initial conditions have not been met, as the Council of Ministers and the National Bank of Belarus announced that payments on Eurobonds in US dollars will be transferred in Belarusian rubles, which contradicts the bond documentation, which does not allow settlements in alternative currencies.

"The rating downgrade applies only to the four mentioned Eurobonds.

The long-term RDE of Belarus in foreign currency was confirmed after it was downgraded to "RD" on July 18 following the end of the grace period for the first Eurobonds that were not executed on the initial terms.

We have confirmed the long-term IDR of Belarus in the national currency at the level of "CCC", as the government continues to service the debt in the national currency, and we do not believe that the default risk of this debt has changed significantly since our previous review on July 18," the agency emphasized.

Chronicle of default

  • On June 28, the Council of Ministers and the National Bank of Belarus adopted a joint resolution according to which "debt obligations on government securities placed on foreign financial markets will be performed in Belarusian rubles according to the National Bank exchange rate on the date of payment."

  • The next day, the Ministry of Finance reported that the next payment for Eurobonds Belarus-2027 in the amount of 22.9 million US dollars was made in Belarusian rubles.

    The money was transferred to a special account at "Belarusbank".

    The department offered the paying agent to independently withdraw funds from this account and settle with the funders.

    On July 7, the paying agent and registry holder Citigroup and Citibank refused to act as agents of Eurobonds of Belarus.

  • In connection with this, the Fitch agency lowered the long-term rating of Belarus to level "C" (imminence of default).

  • On July 12, the Ministry of Finance stated that Fitch Ratings "ignores the force majeure situation" in which Belarus found itself, as well as "the actual impossibility of Western settlement and clearing systems to fully fulfill their obligations regarding the proper transfer of funds to the owners of Eurobonds of Belarus." .

  • On July 15, the international rating agency Moody's stated that it considers the situation with the payment of a foreign loan in Belarusian rubles by the Belarusian authorities to be a default.

  • The ministry called this assessment "biased", as well as "an accurate and predictable execution of the general line of defrauding the default".

  • Moody's and Fitch Ratings together with Standard & Poor's (S&P) form the "big three" of international rating agencies.

Sanctions against Belarus for supporting the Russian war in Ukraine

Alexander Lukashenko admitted that rockets were fired at Ukrainian territory from Belarus.

At the same time, Belarusian soldiers were not sent to Ukrainian territory.

In an interview with Svaboda, the US ambassador to Belarus, Julie Fisher, stated that "Lukashenka's regime is an accomplice of Russia's current invasion of Ukraine, as it allowed Russia to launch an attack from Belarusian territory."

On February 26, Canada and the Council of the European Union announced sanctions against Russia and Belarus.

20 Belarusian officials and military personnel were included in the list.

15 legal entities and 8 individuals were included in the US sanctions list.

On February 28, the ambassadors of the European Union introduced visa sanctions against 22 Belarusian high-ranking officials.

The Maybelline factory in Maladeč was shut down because the Swedish company IKEA closed its business in the country.

IKEA closely cooperated with a number of other manufacturers and factories, including state ones.

Among them is the state-owned "Minsk Furniture Center" from Molodechno, the Mogilev textile manufacturer "Magateks", the Minsk watch factory "Luch" and others.

In March, the European Union banned the export of woodworking products produced or exported from Belarus.

The Ministry of Forestry stated that it was forced to send products from Europe to Asia.

Due to the difficulties of doing business in the region, Booking.com and Airbnb do not operate in the country for finding accommodation during travel and vacations.

The Danish transport and logistics company Maersk announced the cessation of cargo transportation to Belarus on March 4.

Other companies with a similar profile — DHL and FedEx — announced their withdrawal from the Belarusian market.

On March 5, the Finnish company OLVI announced the start of winding down its business in Belarus, where the company owns Lidzkaye Piva.

The plant's 840 employees will receive their salaries for the time being, the shutdown of business will be gradual.

On March 6, the Republic of Korea imposed sanctions.

They introduced export control measures against Belarus, believing that it "significantly contributes to Russia's invasion of Ukraine."

Japan introduced sanctions on March 8.

Assets of individuals and legal entities that have come under the new restrictions are frozen.

Deliveries of dual-use goods to Belarus and exports to the Ministry of Defense of Belarus and "Integral" are prohibited.

The World Bank stopped all programs in Belarus.

The bank noted that it has not approved new loans to Belarus since 2020.

Restrictions affected the sports industry.

Belarusian national teams of various ages have been suspended from participating in international tournaments in hockey, handball and basketball.

The Belarusian national team was not allowed to participate in the 2022 Paralympic Games.

Against the background of sanctions, the Fitch rating agency lowered the long-term sovereign credit rating of Belarus to CCC, which means a real possibility of default.

The American financial company American Express has suspended the provision of services in the country.

No business operations are now possible on her cards.

On March 9, the European Union approved the disconnection of three Belarusian banks from SWIFT.

These are Belagroprombank, Dobrabyt Bank and Development Bank.

On April 16, a complete ban on crossing the border with the European Union by cargo transport of Belarus and Russia will be introduced.

In the decision of the European Union, which was published in the official journal, it is said that the European Union, in accordance with the imposed sanctions, prohibits the import and transit of goods by road transport from Belarus and Russia to the territory of the European Union.