Finance Ministry proposes Soviet debt swap

The Russian Finance Ministry suggested that the obligations of Russia's Vnesheconombank on the debt of the former Soviet Union owed to the International Bank for Economic Cooperation (IBEC) and the International Investment Bank (IIB) should be swapped for Russia's Eurobonds maturing in 2006-2010 and Russia's Eurobonds maturing in 2007-2030, the Finance Ministry's press service reported.

For their part, the IBEC and the IIB suggested swapping Vnesheconombank's obligations on the debt of the former USSR to the IBEC and the IIB for the same amount of debt owed by the IBEC and the IIB to their foreign creditors, the Russian Finance Ministry says.

According to the IBEC and the IIB, Vnesheconombank's debt obligations would be automatically swapped for Russia's bonds maturing in 2030 and 2010, according to Russia's swap proposal. According to the current exchange rates, the principal debts of the IBEC and the IIB are $213.58m and $236.87m, respectively.

The proposal is valid until 17:00 GMT on March 5, 2004. It is expected that the swap deal would be completed on March 16.