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Astana Finance signs term sheet with creditors
(SRI) - Astana Finance and a steering committee of its creditors signed last week a term sheet outlining a plan to restructure the company?s debt, the Kazakh lender said in a statement on Wednesday.
Under the proposed agreement, Astana Finance?s international creditors would absorb haircuts of 80% on debt issued by the lender. The creditors would receive a combination of $100 million in cash, $75 million in zero-coupon one-year bonds, and amortizing four-year bonds, all of which would amount to a net value of 20 cents on the dollar for the lender?s total outstanding foreign debt, including trade finance.
The creditors would also get at least 60% of shares in Astana Finance and 12-year recovery notes, giving them a share of anything recovered from the lender?s impaired assets, the company said.
Kazakh creditors would receive subordinated notes amortizing after the four-year bonds issued to international creditors come due, according to the statement.
Astana Finance was Kazakhstan?s third financial institution to default in 2009, shortly after the near-collapse of BTA Bank and Alliance Bank. Unlike BTA and Alliance, which were the country?s largest and fourth largest bank, respectively, at the time of their defaults, Astana Finance is not considered a lender of systemic importance and has only received limited and largely symbolic support from the Kazakh government.
So far, it has struggled to reach a deal with its creditors who already twice rejected the debt restructuring terms proposed by the lender.
While the signing of the term sheet is a symbolic step forward in the restructuring process, it is a non-binding agreement, and a final deal is subject to securing the consent of all creditors and fulfilling a range of conditions.
According to earlier reports, Astana Finance had roughly $1.7 billion in outstanding debt when it defaulted.
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Source: http://silkroadintelligencer.com/2011/09/22/astana-finance-signs-term-sheet-with-creditors/
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