On 28 October 2022 the JSC “Development Bank of the Republic of Belarus” (the “Issuer”) transferred to the Citibank N.A., London Branch (the “Principal Paying Agent”, “Citibank”) the coupon amount with the payment date 2 November 2022.
The Principal Paying Agent received the abovementioned amount firmly within the time frame set out in the transactional documentation, but did not make any further payment to the international depository systems Clearstream/Euroclear/DTC due to the intention to consult the UK Office of Financial Sanctions Implementation (“OFSI”). In order to settle the retained payment as soon as possible the Issuer independently approached for OFSI’s clarification, but the British sanction governing body pointed out the need to obtain details of its position from the Citibank who was the initiator of the original request.
Notwithstanding multiple mailings and of both Issuer and the Noteholders to reach out the Principal Paying Agent, Citibank refrained from providing information on the November payment. Also, within the reasonable time preceding the 2 May 2023 coupon payment, the Principal Paying Agent had not confirmed that all the subsequent payments related to the Notes would not be withheld and / or disseminated to the Noteholders without the delay at the Principal Paying Agent’s side. However, in respect of the November coupon, the Principal Paying Agent notified that the funds of the November Payment were disseminated to the international depository systems on 9 May 2023, but as of 10 May 2023, the Issuer has no data on the receipt of the coupon by the Noteholders.
Considering the facts above the Issuer, purely due to being concerned to protect the interests of the Noteholders was made to defer the interest payments in respect of the interest payment dates which fell on 2 May 2023 and on 2 November 2023 to the 2 May 2024 (the maturity date).
The draft of the relevant Notice to the Noteholders was sent by the Issuer to Citibank on 29 April 2023 for distribution to the Noteholders in accordance with the procedures set out in the Issue transactional documentation, but was blocked by the latter.
The Issuer values the understanding demonstrated by the Noteholders during the period of the retaining of the November Interest Amount by the Principal Paying Agent. The Issuer emphasizes that it has sufficient financial resources and assets to fully meet its commitments to its partners.
The Issuer (in a prompt manner, but no later than the maturity date) will take all the steps to resolve the issues of administering Eurobond payments, including finding payment methods and mechanisms to ensure that all the Noteholders are protected.
This publication reflects the status of the payment issue at the time of publication, however, given the dynamic nature of the situation, the Issuer acknowledges that the status of the issue may change by the time stakeholders become aware of this publication.
