LONDON, June 19 Azerbaijan's biggest state-run
bank, IBA, said on Monday it was modifying some of the debt
restructuring terms offered to its creditors, including adding
an extra amortisation payment to the new bond that will be
issued as part of the swap.
The International Bank of Azerbaijan (IBA) infuriated
creditors when at the end of May it unveiled a plan to
restructure some $3.3 billion in debt and said senior creditors,
including Eurobond holders, would need to write down some debt
and wait longer to be paid.
Creditors were instead offered the chance to swap their
holdings for $1 billion in sovereign bonds, with senior
creditors given the chance to choose from three restructuring
The bank said in a statement that "having taken into account
feedback received from certain creditors and with the
concurrence of the Ministry of Finance of Azerbaijan" it had
modified "particular aspects of the restructuring plan".
It said the new bond maturing 2032 would be redeemed in
three equal annual installments, instead of two installments as
Participants would also be allowed to request several
different allocation options, instead of opting for just one, it
added. Finally, claimants who agree to vote in favour of the
overall restructuring plan and choose their restructuring option
within an 11-day period will be awarded their preferred
allocation, the bank added.
This is a departure from the original "first-come, first
The bank also said that accrued interest on outstanding debt
would be calculated up to Sept. 1, 2017, as opposed to the
previously stated July 13, 2017.
IBA is being advised by Lazard and law firm White & Case.
Creditors include commodities trader Cargill, Italian lender
Intesa Sanpaolo, Germany's Commerzbank and
Bayerische Landesbank and French bank Societe
Generale while some big asset managers are among
holders of its Eurobond.
Two ad-hoc groups of creditors have formed and IBA said it
has been in talks with one group which controls around $400
million worth of debt.
Another group which includes Franklin Templeton, Fidelity
and two smaller funds, VR and Promeritum, recently filed an
objection in a U.S. court against the restructuring plan
Neither group could be reached for comment on the updated
(Reporting by Sujata Rao; Editing by Toby Chopra)