BankAmerica has made a breakthrough in its efforts to build a capital markets business in Russia. The bank has been named agent for $24 billion in restructured Russian commercial bank debt.

The debt, restructured into principal notes repayable over 25 years, is held by Moscow-based Vnesheconombank. Vnesheconombank, a state-owned financial institution, holds some $33 billion in international debt belonging to the former Soviet Union.

The commercial bank debt has been restructured under an agreement between the London Club, representing all of Russia's commercial bank creditors, and Vnesheconombank and the Russian Ministry of Finance. As restructuring agent, BankAmerica will calculate and distribute payments by Vnesheconombank to creditors. BankAmerica will also be responsible for registering transfers of debt between creditors and reporting changes in debt ownership to Vnesheconombank.

BankAmerica has been expanding its operations in Russia and Eastern Europe as part of a broader move to reduce operations with a low return on capital in favor of higher-yielding activities. The San Francisco-based bank earlier this year opened a subsidiary in Warsaw and has applied for a Russian banking license.

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