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. Last Updated: 07/27/2016

New London Club Proposals Studied




FRANKFURT, Germany -- Russia and its creditor banks say they have had a "constructive dialogue" on the restructuring of Soviet-era debt at a meeting in Frankfurt on Thursday and have scheduled further meetings for the first week of October.


The two sides said in a brief joint statement Friday that the Russian delegation had made a further proposal during the meeting Thursday after responding to a proposal made by the advisory committee of the London Club of creditor banks in previous meetings.


Finance Minister Mikhail Kasyanov, who headed the Russian delegation, was reported by Itar-Tass as saying the London Club had agreed to consider writing off part of Russia's foreign debt.


Meanwhile, credit rating agency Fitch IBCA affirmed Thursday its CCC rating on Russia's sovereign Eurobonds.


It warned that an exchange of new Eurobonds for defaulted bank debt, one of the proposals before the London Club, could undermine outstanding bonds.


"Russia needs a London Club deal, but if you effectively triple the stock of Eurobonds, it could affect their creditworthiness," said David Riley Fitch IBCA's director for emerging Europe.