Belarus calls Moody's comments on Eurobonds default 'provocative'

According to the ratings agency, Belarus is set to pay $38.6 million in two coupons on Aug. 24 and another $46 million on Aug. 28, but its next big redemption comes next year when it has to pay $1.6 billion on two Eurobonds due in 2023.

Belarus' finance ministry said on Friday that a statement from rating agency Moody's saying Minsk had defaulted on its sovereign debt was "provocative" and aimed at creating an artificial shock over its Eurobonds.

Moody's said on Thursday that Belarus' move to pay Belarusian roubles on its dollar-denominated bonds constituted a default, pointing to a coupon paid on the $600 million 10-year Eurobond maturing in 2027. "The Belarusian side has made and will make every effort and will do everything possible to ensure that these rights of the holders of Eurobonds, who trust the Republic of Belarus, are exercised on an alternative basis," the finance ministry said.

Moody's said that holders did not receive $23 million in coupon payments after the 14-day grace period expired as "the government opted to make the payments in Belarusian roubles, which we consider an event of default under our definition." Following similar steps earlier taken by Russia, Belarus said last month it would be servicing its Eurobond debt in its own currency - Belarusian roubles, as Western sanctions limit its ability to deal in foreign currencies.

"Further defaults on future debt payments are likely following this latest resolution and a decree... which provided for the possibility to settle Belarus foreign-currency debt obligations, which amount to more than 97% of total government debt, in Belarusian roubles," Moody's said. According to the ratings agency, Belarus is set to pay $38.6 million in two coupons on Aug. 24 and another $46 million on Aug. 28, but its next big redemption comes next year when it has to pay $1.6 billion on two Eurobonds due in 2023.