print 31.07.2009

Credit-Rating assigns a national rating of byAA to the Republic of Belarus

Credit-Rating agency (Kiev-Minsk) has today announced that it assigned a long-term national scale rating of byAA to the Republic of Belarus on July 13, 2009. The outlook on the rating is stable.

The national long-term credit rating of byAA reflects very high creditworthiness of the Government of the Republic of Belarus in the domestic market versus other Belarus-domiciled obligors.

Stable outlook indicates that there are no anticipated reasons to change the rating in the course of the year.

The value of the long-term (beyond 1 year) credit rating of byAA is the second after the highest possible rating of byAAA, which reflects the highest creditworthiness.

The credit rating assigned to the Republic of Belarus is based upon results of analyzing the Republic’s economic and financial indicators, its demographic profile, state of the labour market, the information on country’s debt obligations in 2005-2008 and 1Q2009 and prospects for the country’s social and economic development. Moreover, Credit-Rating has considered information regarding the country’s government system, its political situation and interaction between different branches of power.

Factors maintaining the Belarus’s credit rating

• Growth rates of the country’s budget revenues recorded in 2006-2008 (25-35%), which was fueled by growth in all revenue sources, with the state budget in the period performed with surplus.
• Positive dynamics of the country’s economic development during 2004-2008, which is mirrored by growth in key macroeconomic figures (the annual growth of the country’s GDP in the period was recorded at 8.6%-11.4% in comparable prices).
• Active participation of the central government in all sectors of the national economy aimed at maintenance of the situation, and securing high social guarantees to the population.
• The President of the Republic holds principal powers, which permits to conduct important structural reforms and contributes to quick decision-making under adversities.

Factors constraining the Belarus’s credit rating

• High dependency of revenue items of the consolidated budget upon results of the country’s foreign economic activities under high concentration or foreign commercial activities on a single partner, the Russian Federation (yet the share of this partner has been decreasing), and high concentration of tax revenues by the biggest tax-payers, with 20 largest tax-payers contributing to a. 30% of the budget revenues.
• Growth of the Republic’s consolidated debt, which, under considerable level of integration between corporate and state economy sectors may prompt pressure on the Republic’s budget expenditures accompanied by simultaneous hampered access to international financial markets.

This rating action is the first ever assignment of the national credit rating to the Republic of Belarus (such ratings are indicated with ‘by’ modifier) and will contribute to development of impartial assessment of obligors/issuers in the domestic market. The National rating scale permits to measure credit risks in the economy of Belarus with exclusion of sovereign risk and is intended for use by issuers of securities, obligors, financial institutions, brokers and invertors in Belarus’s domestic market.

The availability of the rating assigned to the Government of the Republic of Belarus will enable participants of the financial market to employ the rating as a benchmark for assessment of relative risks associated with investing in obligations of non-sovereign obligors versus the Government’s obligations. The employment of credit ratings in the financial market of the Republic of Belarus will allow its participants to measure investment risks more accurately in order to set fair price for risks with consideration of real obligors’ and issuers’ creditworthiness.

Rating Report on assignment of a long-term credit rating to Republic of Belarus (ru)

Note:
Founded in Kiev in 2001, Credit-Rating is currently one of the biggest national credit rating agencies in CIS region.
Credit-Rating was the first to use the National Scale of Credit Ratings in Ukraine’s financial market. The agency is committed to independent assessment of obligors’/issuers’ creditworthiness and to assignment of credit ratings by the national scale.

In early 2009 Credit-Rating completed development of Belarusian National Scale of Credit Ratings. The Credit-Rating’s Minsk-based office commenced its activities in March 2009.

For more information, please contact:
Information and analytic department
Sergey Rozumyak +38044490 25 50
SRozumyak@credit-rating.ua
Denis Rudenko
DRudenko@credit-rating.ua