LONDON, June 13 (Reuters) - Kazakhstan, which holds $250 million worth of debt owed by state-run Azeri lender IBA, will be treated on par with other senior creditors of the bank, a person familiar with the debt restructuring process said on Tuesday.
Kazakhstan's central bank acquired 10-year bonds issued by the International Bank of Azerbaijan via private placement for its pension fund in 2014.
But IBA's plan to restructure $3.3 billion of debt, including the chunk held by Kazakhstan, has sparked anger and led Kazakh authorities to launch an investigation into the purchase .
Kazakhstan is a close political ally of Azerbaijan and the source told Reuters that representatives of the central bank had been in touch with the IBA.
"Negotiations with the central bank pension fund started in May. But they will be in the plan and they will be treated as all other senior creditors ... no special treatment," the source said. "There will be no change to the universe of creditors or the size of the debt stock to be restructured."
The notes held by the Kazakh pension fund would put it in the category of IBA creditors who are required to swap their holdings for longer-dated paper or take a writedown.
But Kazakhstan is not believed to have joined any creditor group so far. IBA which has already petitioned UK and U.S. courts to support the restructuring, says it is in contact with an ad-hoc group of creditors holding over $400 million of its debt.
Another set of creditors, represented by law firm Shearman and Sterling, has this week filed an objection in a U.S. court asking it not to recognise the IBA restructuring.
Reporting by Sujata Rao; Editing by Tom Heneghan