Azerbaijan

International Bank of Azerbaijan, the state-owned lender that defaulted on foreign debts, said it had enough support from creditors to implement a $3.3 billion debt-restructuring plan, Bloomberg News reported. Creditors holding more than 87 percent of the debt affected by the proposal have voted in favor, a day before the deadline, the bank said in a statement on Wednesday. Two-third support is required to make the proposal binding under Azeri rules.
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Azerbaijan’s biggest bank has offered creditors, including Fidelity and Allianz, a series of concessions in a bid to calm disquiet over its $3.3bn restructuring, amid claims that its mishandling of the issue could hurt the country’s investor profile, the Financial Times reported. The state-run International Bank of Azerbaijan, under pressure from a US lawsuit, was forced into negotiations with a group of investors last week. The bank has offered creditors new terms, including extra amortisation payments on new debt, a guaranteed choice of new bonds and an increased interest payment.
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When Azerbaijan’s biggest bank wanted to raise hundreds of millions of dollars from funds in neighboring Kazakhstan, it headed 2,700 miles in the opposite direction to Ireland, Bloomberg News reported. The International Bank of Azerbaijan, or IBA, used obscure Dublin-based entities to sell bonds that were bought by state-linked funds in Kazakhstan about three years ago. Now, the Baku-based lender has defaulted and its long-time chief executive officer is in jail for embezzlement, while a $22 billion national pension fund across the Caspian Sea in Almaty is probing its investment in the debts.
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International Bank of Azerbaijan, the energy exporting country's biggest lender, said on Wednesday a London court had supported its request to prevent creditors pursuing legal action in the United Kingdom, giving it time to restructure $3.3 billion (£2.5 billion) in debt, the International New York Times reported on a Reuters story. A similar decision was made by a U.S. court last month.
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A “too big to fail” trade has backfired on the shores of the Caspian Sea. The International Bank of Azerbaijan is imposing haircuts on holders of $3.3 billion of foreign debt after suffering loan and currency losses, the International New York Times reported. Creditors who had counted on the government to keep propping up the state-owned lender have been taught a painful lesson. The falling price of oil has had harsh effects on Azerbaijan and its banks.
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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, Bloomberg News reported. 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.
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A troubled lender from Azerbaijan is shaping up to be a battleground for U.S. and European investors facing big losses on bondholdings. State-owned International Bank of Azerbaijan, or IBA, filed for bankruptcy in New York on May 11, battered by bad loans and the oil-price rout. It wants to restructure $3.3 billion of debt to help it get back on its feet, according to a proposal accompanying the bankruptcy filing, The Wall Street Journal reported.
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Investors betting Azerbaijan’s debt problems will be contained at the nation’s biggest bank could be in for a shock, Bloomberg News reported. Sovereign yields may jump 40 basis points next week as more details emerge about the International Bank of Azerbaijan’s plan to swap its defaulted debt into new sovereign notes, according to Raiffeisen Bank International AG. On Thursday, Moody’s Investors Service warned the restructuring was “credit negative” for the state oil champion, known as Socar, which keeps about 40 percent of its cash and equivalents at the defaulted lender.
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International Bank of Azerbaijan, the energy exporting country's biggest lender, said on Friday it needed to restructure more than $3 billion of its debt, most owed to foreign creditors, to tackle bad loans left over from the slump in oil prices, the International New York Times reported on a Reuters story. The state-controlled bank announced on Thursday it was suspending payments on some liabilities and seeking creditors' support for restructuring. The news sent IBA's dollar-denominated bond tumbling to its lowest level in over a year.
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