Kazkommertsbank to delay eurobond issue till the improvement of the situation

/IRBIS, June 5, 00/ - REUTERS informs, with the reference to the managing director of Kazkommertsbank, Oleg Kononenko, that the biggest private bank in Kazakhstan delayed planned issue of euronotes until the prices on the world capital markets improve. He said the issue was delayed until prices on the market improve and the investors become more compliant. It is said that there is a great supply of highly profitable securities on the market, including sovereign ones. Sovereign eurobonds of Argentina are said to fall into the same rating category as the Kazakhstani ones. Kononenko said the investors wished to get the highest possible return, while it is not beneficial for the bank to attract at higher rates. The bank planned to launch $150 mln eurobonds for 3-5 years, and had assigned ABN AMRO Bank and Merrill Lynch as the lead managers. In April 1998 Kazkommertsbank launched three-year $100 mln eurobonds, is said. The managing director said the bank has corrected its borrowing policy to make the funds raised on the world capital markets cheap. The bank is said to repay two expensive loans received in less favorable period - after the Russian crisis - ahead of schedule and cut the external borrowing down to 35% from 60%. He said external borrowing did not go beyond $180-200 mln based on the bank's policy, and that since the funds raised on international markets were the majority of the funds, they had been working to balance them with the deposits of the clients. Most of external borrowing is 1998 eurobonds, of which the bank has purchased back 65%. Two syndicated loans are the parts of the bank's external borrowing, with one of them being $10 mln loan from the German banks of the northern territories, and the second being $20 loans signed last Friday. Volume of external borrowing received based on bilateral agreements and as small loans does not exceed $100 mln, said Kononenko. The bank is not going to refuse to issue eurobonds at all, since after the Russian crisis of 1998, according to the bank managers, investors differentiate Russia from Kazakhstan, with the latter being more favorable credit history, is said. Thomson Financial BankWatch raised sovereign ratings of Kazakhstan and Kazkommertsbank to "B+" from "B", while Standard & Poor's and Moody's have also raised the ratings of three Kazakhstani banks (Halyk, TuranAlem and Kazkommertsbank) to "positive" from "stable". The managing director said as soon as the situation was like the one observed now, they leave the matter related to the price of eurobonds in their focus, and that they would return to it when the situation improves. He believes their colleagues from Halyk bank (which was also planned eurobond issue) are also following such policy.