S&P downgrades Belarus

Standard & Poor's said it lowered its sovereign credit ratings on the Republic of Belarus to B-/C from B/B.

The ratings were removed from CreditWatch, where they were placed with negative implications on May 27, 2011.

The outlook is negative.

The transfer and convertibility assessment also was changed to B-, the agency said.

The recovery rating on its senior unsecured debt is unchanged at 4, indicating an expectation of a 30% to 50% recovery in a default.

The downgrades reflect concerns about Belarus' ongoing dependence on external funding due to large current account deficits and a low level of usable reserves, S&P said.

The agency said it remains highly uncertain as to Belarus' ability to secure such funding and the government only has made limited efforts so far to remedy the underlying causes of the external imbalances.

This has put significant pressure on the official exchange rate and has added to economic stress in Belarus, S&P said.

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