Whilst Ukraine Warlord and Oligarch Igor Kolomoisky has been morally bankrupt for some time now he now appears on the verge of financial bankruptcy after a recent failure to meet a recent payment schedule to a US government linked financial institution that specialises in funding wars for resources.
It has been known for quite sometime that Kolomoisky has been financing many Volunteer Battalions fighting against anti-oligarch and anti-fascist militias in eastern Ukraine. Part of this use by Kolomoisky of Privatbanks resources for the war effort has been the use of the Banks armored vehicles in combats zones to steal money from the Banks in the Donetsk and Luhansk Peoples Republics captured by Kolomoisky funded Volunteer Battalions. The financing for these battalions has come primarily from three sources the deposits held by ordinary Ukraine citizens, special government grants and from a US Government linked and Washington DC based financial service company that specialises in loan to warlords who fight wars over resources Callaway Capital Management.
According to the limit information available on its website Callaway Capital Management is a ‘ Washington, DC based investment manager specializing in frontier and emerging market securities’. So it manages funds of behalf of the unnamaed sources that lends money to warring parties in conflict zones who are seeking to seize control of valuable resource projects. It has sold bonds and loaned money to warring parties trying to take over resource projects in other US sponsored conflict zones such as Syria, Iraq, Libya and Venezuela.
The leadership team at Callaway Capital Management are closely linked to both US Republican and Democrat Parties as well as being former operatives for the US State Department and US Department of Defence. Which begs the question as to whether they funds they manage are on behalf of the US Governments global war efforts for resources.
Here is the bios of the leadership team of Callaway Capital Management from their website: http://www.callawaycap.com/#!our-team/c1enr
Daniel Freifeld is the founder of Callaway Capital Management. He was previously Senior Advisor to the Special Envoy for Eurasian Energy at the U.S. Department of State, where he was responsible for oil and gas issues in Iraq, Turkey, Russia, and the eastern Mediterranean. Prior to that, he was a foreign policy advisor on Senator Hillary Clinton’s presidential campaign and a program coordinator for the Near East South Asia Center at the U.S. Department of Defense, working in more than ten Middle Eastern countries. He has also held appointments at the World Bank, Baker Botts, LLP, and the NYU Center on Law and Security. He is currently an associate of the Geopolitics of Energy Project at Harvard University, a term member of the Council on Foreign Relations, and a member of the state bars of Massachusetts and the District of Columbia. He speaks Turkish and French and conversational Arabic, Farsi, and Spanish and holds a bachelor’s degree in political science summa cum laude from Emory University and a juris doctor from New York University School of Law.
Daniel Phillips previously worked on government affairs for energy companies and associations in the Washington, DC office of Mintz, Levin, an international law and government relations firm. Prior to that, he worked in Hong Kong for a private equity fund during its inception and startup phases, as a reporter for Lebanon’s The Daily Star newspaper covering business issues, and at PFC Energy as an analyst in the upstream division. He has also held positions with columnist George Will of the Washington Post and Newsweek, the Embassy of the Islamic Republic of Afghanistan, The Atlantic magazine, and the House of Commons of the United Kingdom. He holds a bachelor’s degree in international relations from Georgetown University and speaks conversational Arabic and Spanish.
William Weir was previously an associate attorney at Sullivan & Cromwell LLP, where his practice focused on representing large financial institutions in connection with complex securities-related investigations and litigation, including inquiries initiated by the SEC, FINRA, and numerous state attorneys general, as well as high-profile investigations conducted by the Senate Permanent Subcommittee on Investigations, the congressionally appointed Financial Crisis Inquiry Commission, and the Department of Justice. While at Sullivan & Cromwell, he also regularly advised clients on compliance with a wide variety of regulatory requirements under the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Advisers Act of 1940, the Investment Company Act of 1940, and the Commodity Exchange Act, as well as various state blue sky laws. He holds a bachelor’s degree in public policy studies from Duke University and a juris doctor from New York University School of Law and is a member of the state bars of New York and California.
Michael Singh serves as an advisor to Callaway Capital Management and is the managing director of the Washington Institute for Near East Policy. Mr. Singh was senior director for Near East and North African Affairs at the White House from 2007-2008, and director for Middle Eastern countries including Iran and Syria on the NSC staff from 2005-2007. Mr. Singh also served as special assistant to Secretaries of State Colin Powell and Condoleezza Rice, as well as staff aide to U.S. ambassador to Israel Dan Kurtzer. He co-chaired Gov. Mitt Romney’s State Department transition team in 2012 and served as an advisor to the Romney presidential campaign. Mr. Singh has served as an adjunct fellow at the Belfer Center for Science and International Security at Harvard’s Kennedy School of Government and as an economics instructor at Harvard College. He has written for outlets including the Washington Post, the New York Times, the Wall Street Journal, Foreign Affairs, the Economist, and International Security. He has also appeared as a commentator on CNN, NBC, Fox News, and other outlets. Mr. Singh earned his bachelor’s degree in economics summa cum laude from Princeton University and an MBA with high distinction (Baker Scholar) from Harvard University.
In reference here is an Reuters article about the default of Privatbank and their loans from Callaway Capital Management
PrivatBank could finally make a breakthrough with its creditors after a minority holdout group of investors that has previously blocked the Ukrainian lender’s attempts to restructure its debts said it will agree to the latest set of proposals.
“We will now support this latest consent solicitation,” said Daniel Freifeld, founder of Washington-based Callaway Capital Management, an asset manager that heads the creditor committee.
The struggles to get the restructuring over the line at the systemically important bank are a microcosm of the challenges facing Ukraine. The state is also going through a protracted debt restructuring process that has only just started to see real progress after months of negotiations.
This week the sovereign has reached an agreement with creditors for a 20% write-down on existing debt. The haircut is halfway between the opening gambits proposed by Ukraine and its investors over recent months.
Like the sovereign, PrivatBank has had to soften its restructuring terms to get bondholders to agree to a deal.
Callaway Capital heads a creditor committee that holds around 25% of PrivatBank’s outstanding US$200m September 2015s – the debt being restructured – but still managed to slam the brakes on attempts to extend the debt’s maturity to January 2018.
“We managed, with vigour and vim, to stitch together a blocking minority between the first two consent solicitations and effectively engage the bank and relevant regulators in Ukraine to reach a radically improved offer,” said Freifeld.
A source close to PrivatBank said, however, that the creditor committee had less of an impact on blocking the earlier restructurings.
For its restructuring, Privat proposed a new amortising bond but in the first two offers, investors were unhappy with the repayment schedule, which was back-loaded.
With its third offer, Privat is proposing a more regular repayment timetable with 20% of the debt due in August 2016, another 20% in February 2017 and 15% each in May, August, and November of 2017.
PrivatBank will repay the remaining 15% in January 2018. A loan linked to the bonds will also be repaid with the same schedule.
This is some improvement for investors, who had already rejected PrivatBank’s previous offer to begin repaying the debt in October 2017.
“Most of the other creditors voted erroneously for the first offering,” said Freifeld, “which created a liquidity crunch because the entire debt was due from late 2017, along with the old 2018 issuance [a separate US$175m 10.875% February 2018 bond]. The new consent solicitation gets rid of that concern by spacing out the amortization starting in 2016.”
PrivatBank is prioritising meeting retail deposit demands over debt obligations, and the National Bank of Ukraine has said that if it lends money to the cash-strapped lender, that money must be used to service deposits.
However, investors remain confident that PrivatBank will be able to find the money to begin repaying the newly-restructured US$200m bond on time, as according to the new schedule.
“There are plenty of ways to find money,” said one investor. “There’s no worry there.”
One term that remains consistent across all PrivatBank’s consent offers is to increase the coupon on the notes. In the first consent solicitation, an increase from 9.375% to 10% was offered. In the latest iteration, the coupon has been increased to 10.25%.
The first consent solicitation saw investors agree to terms on the 2015 bonds, but reject changes to conditions in the 2016 notes. As the deal was contingent on investors approving changes to both bonds, the solicitation failed.
Similarly, the new set of terms is contingent on a restructuring being agreed on the issuer’s outstanding US$150m 5.799% February 2016 bonds. PrivatBank said in July that it wanted to increase the maturity on these notes by five years. Investors have already informally agreed in principle to the restructuring, according to a source.
However, a maturity extension is not essential for PrivatBank to consider the notes restructured – and therefore allow the 2015s to be extended.
PrivatBank said in a message to investors: “For the avoidance of doubt, the 2016 notes restructuring may include any other amendments to the 2016 notes in addition to extension of maturity of the 2016 notes.”
For source article see http://www.reuters.com/article/2015/08/27/bonds-privatbnk-ukraine-idUSL5N1110ZV20150827