UPDATE 1-Belarus marketing US dollar dual-trancher

(Adds pricing commentary, context)

LONDON, June 22 (IFR) - The Republic of Belarus has opened books on a US dollar dual-tranche offering, according to a lead.

The sovereign is marketing benchmark notes due February 2023 at a yield of low to mid 7%, and benchmark notes due June 2027 at a yield of high 7% to 8%.

Investors have been divided in the run up to the bond hitting the screens over fair value, although many thought it should come wide of Ukraine.

But the yield that Belarus has begun marketing its bonds suggests that it is seeking to price inside Ukraine.

“Looks tight versus Ukraine,” said a banker away.

Ukraine’s September 2027s, for example, are bid at 97.024 to yield 8.184%, according to Tradeweb.

Belarus last issued a bond in 2011. It has since tried to return a number of times but without success, partly because many banks said they would not touch a deal.

The country is one of the more controversial issuers that could try to access the markets. Its outspoken president, Alexander Lukashenko, is on a list of 16 people and nine entities in the country that are subject to US sanctions.

However, the sovereign is free to issue international debt as the West tries to re-engage with Belarus.

In April, the US extended economic sanctions relief for Belarus for six months, continuing a policy begun during the Obama administration intended to encourage a country traditionally in Russia’s orbit to turn to the West.

The EU lifted the majority of its sanctions in February 2016, although some restrictive measures are still in place, including an arms embargo.

The 144A/Reg S deal is today’s business via Citigroup and Raiffeisen Bank International.

Belarus is rated Caa1/B-/B-. The bonds are expected to be rated B-/B-. (Reporting by Robert Hogg; editing by Sudip Roy)