BELARUS NEWS AND ANALYSIS

DATE:

27/03/2007

Belarus picks ABN Amro to advise on credit ratings

MINSK, March 27 (Reuters) - Belarus has mandated Dutch bank ABN Amro (AAH.AS: Quote, Profile, Research) to advise on international credit ratings, which the country wants to obtain in the first half of 2007, Belarus' state news agency BelTA reported on Tuesday. Belarus, whose President Alexander Lukashenko is criticised in the West for oppressing political opponents and stifling the media, started talks on credit ratings in 2003 but then suspended them due to fears it would be granted a low rating.

Talks resumed last year when the government sent requests to international ratings agencies Standard&Poor's, Moody's and Fitch.

"The finance ministry will soon start working with the rating adviser who will contact rating agencies," the report said. "Belarus will be able to get the credit rating by the end of the first half as planned. It is possible that it will be done by two agencies".

Minsk needs the rating to tap international capital markets.

The country needs extra money this year following a row with its main political and economic ally, Russia, over energy prices. Russia doubled gas prices for Belarus from January.

Belarus's economy is run along with Soviet-era command lines with the government controlling most prices and ordering companies what to produce. Foreign investments have been virtually non-existent.

However, macroeconomic figures are good as Belarus has benefited from economic growth in neighbouring Russia and Ukraine. Gross domestic product grew by about 10 percent in 2006 and inflation slowed to 7 percent last year. Growth for this year is also forecast at around 10 percent.

Last year, ABN Amro advised Belarus on the valuation of state gas pipeline operator Beltransgas. Russia's gas export monopoly Gazprom (GAZP.MM: Quote, Profile, Research) agreed to buy 50 percent in it for $2.5 billion following the valuation.

Investment bank Barclays (BARC.L: Quote, Profile, Research) is in talks to take over ABN Amro.

((Reporting by Andrei Makhovsky, writing by Olena Horodetska, Reuters Messaging: olena.horodetska.reuters.com@reuters.net; +380 44 244 9150; editing by David Christian-Edwards)) Keywords: BELARUS RATING/ABNAMRO

Source:

http://www.reuters.com/article/bankingfinancial-SP/idUSL2719067120070327