Otkritie to write down old-style tier twos: 'see you in court'

Otkritie Capital px230
By Virginia Furness
05 Dec 2017

Russia’s Otkritie Bank last week announced plans to write down its outstanding tier two bonds, including an old-style $500m 10% April 2019 tier two, the contractual terms of which did not include a write-down feature. The move was an invitation to sue the private lender, said one EM portfolio manager, and GlobalCapital can reveal that Baker & McKenzie is building a case to bring against the bank.

“Now we have the write-off, the Central Bank of Russia [which has bailed out Otkritie] has acted and shown its hand, so we have the right to take action for the $500m of principal, and $100m of interest,” said Simon Morgan, a partner at Baker & McKenzie in ...

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