How Kazakhstan dealt with Senoir Bondholders

SKELLY

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Feb 23, 2009
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AS IRELAND grapples with its banking crisis, distant Kazakhstan, which dealt with its own blow-up in February 2009, offers an interesting lesson. The Kazakh restructuring, completed in September this year, is unusual because instead of getting a state guarantee, the majority of the creditors of BTA Bank, the biggest problem, shared the pain. Even senior bondholders, who are high in the pecking order, were hit. In most other countries—including Ireland, so far—they have been wrapped in cotton wool, at taxpayers’ expense.

Most BTA creditors were offered a menu of options which included a haircut on their assets, various combinations of senior and subordinated debt, and a small stake in the bank’s equity to keep them interested in its future. The government faced down those who warned that, if senior bondholders and trade creditors were included, the market would ostracise Kazakhstan for years. Around $12 billion of bonds and commercial debt was reduced to $4 billion. The external debt of the Kazakh banking sector, which was 26% of GDP when the crisis struck, has been roughly halved.
Restructuring banks: Don't start from here | The Economist

Could someone pass this on to Lendahand and biffo?!

oh, and ye FF apologists here should have a good read.
 


MDaniel

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Jun 27, 2009
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552
Can't suspect The Economist of being a left-wing publication. But there again it might to high brow for Biffo. Lenihan prefers oral advice, maybe he need a recording of the article to listen during his sleep to be brainwashed into doing the right thing:p
 

drummed

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Oct 22, 2010
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Can't compare ireland to Kazakhstan, it's an undemocratic 3rd world state.
Oh wait....maybe we can
 


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