Fitch Ratings downgrades Belarusian Development Bank

May 19, BPN. Fitch Ratings has downgraded the Belarusian Development Bank’s long-term foreign currency issuer default rating to RD from C.

“The downgrade follows the expiry of a 14-day grace period on the bank’s US dollar-denominated Eurobond coupon payment,” the credit rating agency said on its website. “We view this a restricted default.”

The downgrade doesn’t apply to the bank’s long-term local currency IDR, it added.

The Belarusian banking sector faces a fragile stability that is influenced by the government’s control, the political crisis and the external shocks, according to some sources.

Last month, Fitch Ratings affirmed Belarus’ LTFC IDR at RD.

The rating “reflects the ongoing payment of US dollar Eurobond obligations in local currency,” with the most recent payment made in late February, it said. This practice violates bond conditions that prohibit settlement in alternative currencies, it added.