International Bank of Azerbaijan, the country’s largest lender, has offered creditors a restructuring plan to swap the $3.3bn bank’s debt for sovereign paper, in a bid to rescue the bank after it defaulted earlier this month.
Senior creditors have been offered a choice of either taking new sovereign bonds of various lengths, one tranche with a haircut of 20 per cent. Holders of subordinated debt have been offered a new 12-year sovereign bond with a 50 per cent haircut.
The programme, which was presented to investors on Tuesday, will be binding on all investors if creditors representing two-thirds of the debt by value support it.
The systemically-important bank halted its debt payments and began restructuring talks with creditors earlier this month, after an economic crisis in the former Soviet republic caused by the slump in oil prices pushed the lender to the brink of collapse.