LONDON May 23 The International Bank of
Azerbaijan on Tuesday offered creditors several options in its
debt restructuring, including swapping into 12- or 15-year
sovereign bonds, the former involving a write-down.
Eric Lalo, managing director at Lazard which is advising the
bank, said trade finance instruments could be exchanged for
sovereign paper at par, repayable over four years and amortising
Lalo said senior creditors, including Eurobond holders would
have three options, the first being swapping into sovereign
bonds with a 12-year maturity but amortising in three annual
installments in years 10,11 and 12. These would carry a 5-1/8
percent rate and with an "enhancement value" priced at 20 cents
in the dollar.
"This is nor one for one exchange," Lalo told investors.
The second option involves a one-on-one swap into 15-year
sovereign debt while the third option is to stay with IBA, with
bonds exchanged at par for a 7-year 3.5 percent issue, Lalo
The bank last week said it was suspending payments on some
liabilities and seeking creditors' support to restructure more
than $3 billion of debt.
Finance Minister Samir Sharifov told creditors the
government debt-to-GDP would rise by $2.34 billion to 27 percent
of GDP as a result of the restructuring. He said debt holders
would receive significant "credit enhancement" by getting
instruments of the higher-rated sovereign.
IBA is being also represented by White & Case.
(Reporting by Sujata Rao and Karin Strohecker)