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 to the bond issue of the Republic of Belarus (hereinafter, Belarus or the country):

• B+ under the international scale;

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

Credit rating rationale. The bond issue listed below 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 fiscal reserves accumulated in previous years, risks of materialization of contingent liabilities, weak external position, and limited domestic capital market capacity. In order to affirm the credit ratings of the bond issue, ACRA took into account the credit assessment of Belarus.

The country’s credit quality is based on recovering industry and wholesale trade, stabilizing inflation, decreasing external debt, and retention of international reserves amid national currency repayments on external public debt. In 2024, the Belarusian economy demonstrated an acceleration in growth rates due to the satisfaction of both external and domestic demand. Real GDP increased by 4.9% in January to August 2024 year-on-year according to official data. Foreign trade in goods increased by 5% in foreign currency value in January to July 2024. However, in ACRA’s opinion, the current dynamics may be short-term given that the economy is experiencing a shortage in the labor market, and external demand from Russia is likely to slow the pace of growth over the coming months. The IT sector, previously one of the drivers of the national economy, is not demonstrating significant recovery since the downturn in 2022–2023. The key factor supporting the recovery of the Belarusian economy is the ongoing integration with Russia, including trade. The credit quality of Belarus will largely depend on its ability to transition 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 under ACRA’s International Scale to Credit Ratings Assigned under ACRA’s National Scales. The Key Concepts Used by the Analytical Credit Rating Agency Within the Scope of Its Rating Activities were also applied to assign the credit ratings.

The credit ratings of the series 08 bond issue (ISIN RU000A1052U9) of the Republic of Belarus under the international scale and the national scale for the Russian Federation were published by ACRA for the first time on April 6, 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 of the series 08 bond issue (ISIN RU000A1052U9) of the Republic of Belarus under the international scale and the national scale for the Russian Federation were disclosed earlier than the dates specified in the Calendar of sovereign credit rating revisions and publications due to prompt performance of procedures for reviewing and coordinating the disclosed information with the rated entity. The planned review date was September 27, 2024, the actual review date is September 27, 2024. The planned disclosure date was October 3, 2024, the new disclosure date is October 2, 2024.

The credit ratings were assigned 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 their 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 credit rating assignment.