Creditors Cry Foul After Default as Azeri Bank Offers Debt Swap
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Investors dismayed at being forced to accept a 20 percent principal writedown in a debt restructuring of Azerbaijan’s biggest bank were met with a warning that it may be shut down if creditors fail to back the plan, with the finance minister saying the lender never had the benefit of full sovereign guarantee.
The International Bank of Azerbaijan proposed swapping $3.3 billion of its foreign-currency debt and deposits into a mix of new sovereign securities and the lender’s own bonds, according to a presentation in London on Tuesday. The proposed plan will become binding if approved by creditors accounting for two-thirds of the company’s affected debt by value. Azerbaijan wants to complete the restructuring on Aug. 24.