SOVEREIGN DEBT RESTRUCTURING | MASTERCLASS

A deep dive masterclass on sovereign debt restructuring, to be conducted virtually by Asian high yield bond expert Florian Schmidt.

30 June 2022 (Thu), 5pm Singapore/HK time

Garuda Indonesia’s creditors approved $9.6bn in restructuring proposals with a majority vote. More than 95% of creditors who attended the vote last week at the Jakarta court accepted Garuda’s proposal with ~$9.6bn in claims to be settled by agreement. The plan was for aircraft manufacturers, lessors, maintenance vendors, and Islamic bond investors to take a large haircut, and exchange the remaining amount with $825mn of new 9Y bonds and $330mn in stock. This scheme would restructure about $5.5-6bn of liabilities, while the remaining, including loans to state firms would be extended without a cut. Claims are submitted by Rolls-Royce, Airbus and investors holding $500mn in its Islamic bonds, as per Reuters. Potential claims by Boeing related to the airline’s plan to terminate its order for 49 of Boeing’s 737 MAX 8 planes were also taken into account for Garuda’s bond and equity offers. Boeing had not participated in the court process. Garuda CEO Setiaputra said. “Boeing will have 30 days from Monday to put forward its claim, estimated at $822 million. If it fails to do so, the offer would be deducted from the total bonds and shares and the remainder would be prorated to other creditors”.

Garuda’s dollar bonds were trading lower with its 5.95% 2023s down over 0.3 points to 19.5 cents to a dollar.

For the full story, click here

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