Russia to announce 2nd tranche swap of Soviet commercial debt

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MOSCOW, September 8 (RIA Novosti) - Russia will announce next week the start of a procedure to exchange the second tranche of its Soviet-era commercial debt, a Finance Ministry spokesman said Friday.

"Next week, the Finance Ministry plans to officially announce the second stage of the former Soviet Union's commercial debt swap," the spokesman said. "The official statement to all creditors will be published on the [ministry's] Web site, and they will also receive it by e-mail and on hard copy."

"Russia will officially propose that creditors claiming repayment for unpaid goods deliveries swap those claims on London Club terms, i.e. swap the claims for Euro bonds with a maturity in 2010 and 2030, and receive partial payment in cash," he said.

He said the share of cash repayments was not considerable and would total about 9.5% of the total sum.

The Soviet-era debt to commercial lenders accrued as a result of the export of goods and services by foreign companies. The Russian Finance Ministry estimates the principal sum of this debt at more than $1.7 billion.

The Finance Ministry swapped the first tranche of Russia's Soviet-era debt to commercial creditors for its Eurobonds in December 2002. Claims worth $1.28 billion were recognized for the swap, and as a result, Russia's Eurobond issue totaled $1.37 billion.

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