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. Last Updated: 07/27/2016

Alfa Bank Says Deal Signed To Reschedule Foreign Loan

One of Russia's biggest banks, Alfa Bank, announced Monday it had signed a framework agreement with Western creditors on rescheduling a $77 million loan.

Alfa Bank's creditors said they were still in talks with the Russian bank but expected a deal to be reached soon on an "amicable" basis.

Alfa Bank Managing Director Alex Knaster said Wednesday that the banks and its creditors, a syndicate of 25 banks led by Bank of America, had agreed "a term sheet of business issues" involved in rescheduling the one-year loan, which came due last month.

Knaster said this means that the creditors agreed to let Alfa repay only part of the loan immediately upon signing a final agreement within two weeks. The Russian bank would then pay out the remaining principal with all the past due interest "over a period of time."

"No debt forgiveness is involved," Knaster said.

He added he was bound by confidentiality not to release more specific details of the plan.

Knaster said Alfa Bank negotiated with a steering committee of creditors, which, apart from Bank of America, included Dresdner Bank, Societe Generale and Bank of Montreal.

A representative of one of the banks on the steering committee, speaking on condition of anonymity, said Wednesday that no deal was yet in place, but the creditors expected to sign one "in the near future." "There is no restructuring agreement yet, but both parties are working very amicably toward it," the bank representative said.

One big Russian bank has already succeeded in restructuring a Western loan since the Aug. 17 devaluation and domestic debt default. Earlier this month, Avtobank reached an agreement on rescheduling a $47 million loan from Credit Agricole Indosuez.

Knaster said the $77 million loan was Alfa Bank's only foreign obligation that needed restructuring.