S&P cuts Belagroprombank

S&P said it lowered Belagroprombank JSC’s foreign-currency long-term issuer credit rating to CC from CCC. The rating remains on CreditWatch with negative implications, where it was placed on March 1.

Concurrently, the agency affirmed the issuer’s CCC local-currency rating and removed it from CreditWatch negative where it was also placed on March 1.

“We lowered the foreign-currency sovereign rating because the Belarus government reported difficulties in meeting its principal and interest payments on debt owed to multilateral lending institutions (MLI) due in April. These disruptions were triggered by international sanctions that denied or significantly diminished the authorities' access to global financial infrastructure,” S&P said in a press release.

“Generally, we don't rate banks above the sovereign rating because of the likely direct and indirect influence of sovereign distress on their operations, including their ability to service foreign currency obligations. We consider the financial performance of Belagroprombank to be closely tied to that of the sovereign because it has relied on support from the government in the past. We therefore cap our ratings on the bank at the level of the sovereign credit rating on Belarus,” the agency explained.

The negative outlook on the local-currency rating reflects the high level of macroeconomic and fiscal stress, S&P said.

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