Belarus switches to new way of making eurobond payments to investors from Russia

Payments of the face value and the accumulated interest income were made on 28 December 2023 taking into account provisions of resolution No.643/20 passed by the Council of Ministers and the National Bank of the Republic of Belarus on 26 September 2022 to regulate individual operations with government securities and on the basis of the list of eurobond holders provided by Russia's National Settlement Depository. The eurobond holders had passed verification procedures and had submitted documents according to the established procedure.

The monetary assets in Belarusian rubles were transferred from a dedicated bank account previously opened in OAO ASB Belarusbank to honor Belarus' obligations on eurobonds. The account was opened in line with the government's and the central bank's resolution No.212/10 of 6 April 2022. The resolution introduced temporary measures for honoring external state debt commitments.

BelTA reported earlier that in late February 2022 the Belarusian Finance Ministry transferred the full sum of the interest yield on Belarus' eurobonds in U.S. dollars to the paying agent – London-based Citibank. The bank was supposed to transfer the money to international clearing systems. In turn, the clearing systems were supposed to transfer the money further to bond holders. However, the Finance Ministry started receiving multiple complaints from the bond holders, who said they had not received the sums they were owed partially or in full. Western infrastructure was the reason. Since the Western clearing system could not guarantee full and timely payments to the eurobond holders, Belarus offered various options for the eurobond holders to get the payments they are owed. The eurobond holders were free to choose between exchanging their eurobonds for domestic government bonds, getting their eurobonds redeemed at a discount, and getting eurobond payments in Belarusian rubles.

Belarus and Russia have been recently working out a common mechanism for transferring the money to investors. According to Finance Minister Yuri Seliverstov, the National Settlement Depository (Russia's central depository) was suggested as a one-stop shop for facilitating all the transactions. “We are working to develop a mechanism that bypasses the Western infrastructure and enables payments between the two friendly states,” the official noted.