Azerbaijan’s Biggest Bank Offers Creditors New Concessions

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. But some bondholders say the company, which defaulted in May, is causing long-term damage to the Central Asian economy’s reputation by imposing haircuts, repayment delays and a forced exchange of bonds for sovereign paper, instead of tapping its national reserves. “The new proposal is as disappointing as the previous one,” said Lutz Roehmeyer, a portfolio manager at Landesbank Berlin who holds IBA bonds and will vote against the new offer. “International investors can’t understand why an oil-rich country with a huge sovereign wealth fund does not have the money to pay back [investors].” Read more. (Subscription required.)