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July 21, 2017 www.intellinews.com I Page 23
bne:Credit IBA wins support for
debt restructuring
An overwhelming majority of creditors (93.9%) of the International Bank of Azerbaijan (IBA) approved the bank's revised debt restructuring plan at a meeting on July 18. Azerbaijan's largest bank, state-owned IBA needed the approval of two thirds of creditors to swap its obligations for sovereign ones under less favourable terms.
IBA's default on $3.3bn worth of foreign obligations in May came as a surprise to investors, because the bank had already been res- cued by the government once in 2015 and because the government had offered verbal reassurances to creditors in recent months.
The terms of the restructuring plan, which was made public in
late May, angered some investors, such as asset managers Fidelity Capital and Franklin Templeton and hedge funds Promeritum Fund and VR Global Partners, which filed a complaint in a US court against the lender in June. However, their case was rejected in late June.
A $4bn Russian eurobond swap, slated to happen this autumn, may fall foul of geopolitics, says Konstantin Vyshkovsky, the head of debt at Russia’s finance ministry.
The Ministry of Finance said that it wants to return to the market this autumn to refinance another $4bn worth of debt that is coming due by swapping the existing debt for new paper. However, while issuing new debt is relatively straightforward, Vyshkovsky said in an interview that the swap is more exposed to geopolitics. The US Senate has threatened to put more sanctions on Russia that may affect the attractiveness of the bonds.
“For the swap, the factor of geopolitics probably has greater significance than for a regular placement,” Vyshkovsky said in remarks reported by Bloomberg. “If the overall background will be negative, we can abandon plans to conduct a swap this year altogether.”
Russian eurobond this year in doubt