Ryanair scandal drops Belarusian bonds in record price

On Monday, May 24, the issue of dollar bonds of Belarus with maturity in 2031 fell in price by 2.7 percentage points, other issues of Belarus showed similar dynamics, the issue with maturity in 2027 fell more than others (minus 2.9 p.p. with an increase in yield by 58 bp).

On Tuesday, May 25, the value of ten-year bonds on the Frankfurt Stock Exchange continued to fall. Decrease in value reached 90.94% of par (minus 3.01 p.p. from the end of last week with a yield of 7.83%).

At this price, Belarusian bonds were trading amid protests that rocked the country in September 2020, fueled by electoral fraud, massive human rights violations and the country's irremovability.

“The cost of sovereign Eurobonds of Belarus fell to the levels of the fall of 2020 due to geopolitical tensions in connection with the forced landing in Minsk of the Ryanair plane, which was flown by the former editor-in-chief of the Nexta Telegram channel Roman Protasevich”, - RBC reports.

According to experts, in such conditions, the financial dependence of Belarus on Russia will continue to grow. The republic will be able to refinance its debts only on the Russian market or with the participation of Russia.

According to Bloomberg, negative expectations of investors are fueled by reports of the imminent introduction of anti-Belarusian sanctions . Earlier it became known that after the forced landing of a Ryanair plane in Minsk and the arrest of Protasevich and his girlfriend Sofia Sapieha, 27 leaders of European countries demanded the release of the journalist and banned the flights of Belarusian air carriers over the EU. At the same time, European airlines were advised to refrain from flying over the territory of Belarus. Many carriers have followed this advice.

Meanwhile, the financial situation in Belarus continues to deteriorate. Analysts have not yet talked about the risk of default, but the sanctions imposed by the US and the EU in connection with massive violations of human rights in Belarus are fraught with a serious drop in export earnings and foreign exchange earnings for the republic.