Creditors of Azerbaijan’s biggest bank are taking steps to block terms outlined by the lender earlier this week in a $3.3 billion debt restructuring, according to two members of the investor group, Bloomberg News reported yesterday. Debtholders of the International Bank of Azerbaijan are arguing that their voting rights were diluted by the inclusion in the restructuring of a $1 billion deposit owed to the country’s oil fund, according to the people, who declined to be named because the discussions are private. The state-run lender drew the ire of investors at a presentation in London on Tuesday with a proposal to swap foreign-currency debt and deposits into a mix of new sovereign securities and the lender’s own bonds. The plan, which includes a 20 percent principal writedown for some of the senior claims, will become binding if approved by creditors accounting for two-thirds of the company’s affected debt by value. Azerbaijan wants to complete the restructuring on Aug. 24.
