Rusal Creditors Said to Hold Talks With Treasury on Bond Impasse
Rusal Creditors Said to Hold Talks With Treasury on Bond Impasse
(Bloomberg) -- United Co. Rusal Plc’s bondholders are asking the U.S. Treasury to let them trade out of the sanctioned Russian company’s dollar debt.
Investors holding some of the company’s $1.6 billion of international bonds have held meetings and conference calls with representatives from the Treasury’s Office of Foreign Assets Control, people familiar with the matter said. They are asking officials to include the Irish subsidiary that issued the Rusal bonds on a list of companies whose securities can be traded until May 7 and for an extension of that deadline, the people said, requesting not to be named because the information is private.
The U.S. government has already agreed to some softening in its stance toward Rusal following weeks of complaints from investors and affected businesses. Treasury Secretary Steven Mnuchin on Monday extended a deadline for companies to wind down dealings with the Russian aluminum producer to October and said he may grant more concessions if the firm severed ties with its biggest shareholder Oleg Deripaska.
The Treasury went as far as to say that Rusal can use American dollars for debt payments related to Rusal’s wind-down operations, reducing the risk of the company defaulting on a bond coupon due on May 3.
However, investors are unable to sell the bonds. That’s because the issuing entity isn’t explicitly included in the General License 13, a Treasury document issued on April 6 outlining what trading activities are allowed before sanctions kick in, and the largest clearing houses Euroclear and Clearstream are adhering to that wording.
A Treasury department spokesman didn’t reply to a request for comment.
--With assistance from Saleha Mohsin
To contact the reporters on this story: Luca Casiraghi in London at lcasiraghi@bloomberg.net, Ksenia Galouchko in Moscow at kgalouchko1@bloomberg.net.
To contact the editors responsible for this story: Abigail Moses at amoses5@bloomberg.net, Chris Vellacott, Torrey Clark
©2018 Bloomberg L.P.