Belarus

Development bank also exploring funding package for Ukraine

Belarus's sovereign bonds tumbled on Monday morning at the prospect of further EU sanctions.

Belarus this week gave investors a chance to demonstrate the ESG credentials they are often so keen to trumpet. Few took it. Although the country’s sovereign bonds sold off in the wake of the controversial arrest of a journalist on Sunday, investors gave a number of reasons why issues such as human rights violations were no deterrent to buying an issuer’s bonds. But there are signs those excuses may not hold up for ever, writes Mariam Meskin.

Following the international outcry over the forced landing of a Ryanair passenger plane carrying a Belarusian dissident, some emerging markets investors are said to have had sudden doubts about the ESG characteristics of Belarusian sovereign bonds. What took them so long?

The EU has agreed to hit Belarus with sanctions and restrictions in the aftermath of the grounding of a Ryanair flight and the arrest of one of its passengers, journalist and activist Roman Protasevich. Market participants say that market access for the sovereign is in doubt.

Investors have turned against Belarus after an opposition blogger and journalist was arrested by authorities on Sunday in extraordinary circumstances, with the country's dollar bonds dropping sharply on Monday morning.

The European Union is to impose sanctions on leading Belarusian officials after condemning the country’s presidential election as rigged. But bond investors are not in panic mode.

Political unrest in Belarus has thrown up difficult questions for emerging market investors, as ESG concerns rise and those who would buy still not seeing an attractive opportunity to do so.

Just one week after selling $1.25bn of bonds, Belarus’s yield curve has widened as protests hit the country.

The Republic of Belarus ditched euros on its return to bond markets on Wednesday, printing two dollar tranches on which it was able to ratchet pricing tighter.

The Republic of Belarus is taking a second run at the new issue market after its first round of marketing ran into Covid-19.

The Republic of Belarus will roadshow a dollar and euro dual trancher next week, but made it clear in the mandate announcement that there may be a wait before the bond is printed.