Belarus working on ways to make eurobond payments to Russian investors without West infrastructure

BelTA reported earlier that in late February 2022 the Belarusian Finance Ministry transferred the full sum of the interest yield on 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 are now working out a common mechanism for transferring the money to investors. A decision has been made in favor of working with authorized depositories of the neighboring country instead of working directly with natural persons. More than ten depositories like that are available.

Yuri Seliverstov went on saying: “We are working on an agreement with the National Settlement Depository (Russia's central depository), which our partners suggested as a one-stop shop for facilitating all the transactions. Once our partners gather all their papers in this depository and give us lists of the bond holders, we will begin transactions with them. We have not carried out the operation yet. We are working out the appropriate procedures with them. We are working to develop a mechanism that bypasses the Western infrastructure and enables payments between the two friendly states.”