WORKOUT:

After two years of negotiations, commercial-bank (“London Club”) creditors completed negotiations with Russia on a restructuring of $32 billion in Soviet-era debt. Under the agreement, 37.5 percent of the principal and 33 percent of the interest arrears will be forgiven, and new securities with 30- and 10-year maturities will be issued to cover outstanding principal and interest respectively. Finance Minister Mikhail Kasyanov expects a similar deal to be reached with official “Paris Club” creditors in the near future. Soviet-era debt to Paris Club creditors amounts to $42 billion.