ACRA AFFIRMS B+ AND BBB-(RU) TO THE SERIES 08 BOND ISSUE (ISIN RU000A1052U9) OF THE REPUBLIC OF BELARUS

ACRA has affirmed the following credit ratings of the bond of the Republic of Belarus (hereinafter, Belarus):

• B+ on the international scale;

• BBB-(RU) on the national scale for the Russian Federation.

Credit rating rationale. The bond issue represents senior unsecured debt of Belarus, whose credit quality is supported by the relatively high level of economic wealth, moderate public debt, and deep integration with Russia but is constrained by the reduction of reserves (primarily fiscal) accumulated in previous years, risks of materialization of contingent liabilities, weak external position, and limited domestic capital market capacity. In order to affirm the above credit ratings, ACRA applied the credit assessment of Belarus.

The credit quality of Belarus is supported by recovering industry, growing investments, declining inflation, decreasing external debt, and retention of international reserves amid national currency repayments on the external public debt. In 2023, the Belarusian economy is showing recovery, but in ACRA’s opinion, the sustainability of this process is still uncertain. Prices for the country's main export goods are declining this year, the volume of exports of these goods lags behind the pre-crisis volumes, transportation costs have increased. Prices are regulated for a wide range of goods in the consumer basket. The information technology sector, one of the drivers of the national economy, is continuing to decline.

The key factor supporting the recovery of Belarusian economy is the ongoing integration with Russia, including trade. The credit quality of Belarus will largely depend on its ability to maintain the recovering momentum and the transition of the economy to sustainable growth rates in the absence of negative external and internal shocks.

Key issue properties

Sources: ACRA, issuer’s data

regulatory disclosure

The credit rating has been assigned to the series 08 bond issue (ISIN RU000A1052U9) of the Republic of Belarus under the international scale based on the Methodology for Assigning Credit Ratings to Financial Instruments under the International Scale. The credit rating has been assigned to the series 08 bond issue (ISIN RU000A1052U9) of the Republic of Belarus under the national scale for the Russian Federation based on the Methodology for Mapping Credit Ratings Assigned on ACRA’s International Scale to Credit Ratings Assigned on ACRA’s National Scales. The Key Concepts Used by the Analytical Credit Rating Agency Within the Scope of Its Rating Activities was also applied to assign the credit ratings.

The credit ratings of the series 08 bond issue (ISIN RU000A1052U9) of the Republic of Belarus were published by ACRA for the first time on April 4, 2023. The credit ratings have been revised and disclosed prior to the dates specified in the Calendar of sovereign credit rating revisions and publications due to prompt performance of revision procedures and agreement of the disclosed information with the issuer. Planned revision date is January 23, 2024, new revision date: November 9, 2023. Planned publication date is January 26, 2024. New publication date is November 14, 2023. The credit ratings are expected to be revised within 182 days following the publication date of this press release as per the Calendar of sovereign credit rating revisions and publications.

The credit ratings are based on data provided by the Republic of Belarus, information from publicly available sources and ACRA’s own databases. The credit ratings are solicited, and the Government of the Republic of Belarus participated in the credit rating assignment.

In assigning the credit ratings, ACRA used only information, the quality and reliability of which were, in ACRA’s opinion, appropriate and sufficient to apply the methodologies.

ACRA provided no additional services to the Government of the Republic of Belarus. No conflicts of interest were discovered in the course of the sovereign credit rating assignment.