Belarus to Again Test Debt Markets 

(Bloomberg) -- Belarus plans a return to international debt markets, seizing on a revival in global credit markets to secure long-sought financing.

The former Soviet republic’s decision to mandate banks for investor calls about a potential a dual-tranche deal comes after fresh stimulus from the Federal Reserve triggered a new dash for higher-yielding assets. A placement in the U.S. currency would be the first dollar debt sale in more than two years for the country, which is rated five rungs below investment grade at both S&P Global Ratings and Fitch Ratings.

East Europe Places Two Years’ Worth of Debt in Crisis Spree

Belarus is taking a second attempt at an international bond sale this year after the spread of the coronavirus thwarted plans for euro- and dollar-denominated issuance. The government is looking to fill its coffers and buttress the economy before presidential elections in August.

Alexander Lukashenko, who has ruled the nation with an iron fist for the past 26 years, is facing mounting opposition at home with voter weariness on the rise and the economy flagging. He’s also at loggerheads with his main partner -- Russia -- which sharply reduced vital crude oil supplies after Belarus resisted demands for closer political integration.

Market Momentum

A successful sale would make Belarus one of the riskiest countries to sell foreign debt since the start of the pandemic, as unprecedented stimulus by central banks in developed markets helps buoy investor appetite. Egypt, rated one step higher at Fitch, sold a record $5 billion in bonds last month.

“I think the momentum will be there,” said Anton Hauser, a money manager at Erste Group Bank AG’s investment arm in Vienna who plans to participate in the deal. Central bank stimulus is mainly concentrated on high-grade issuers, but there is definitely a trickle-down effect at work, which supports high-yield and emerging-market issues, he said.

Belarus’s Finance Ministry declined to comment.

©2020 Bloomberg L.P.

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