MEIKAM-48 of the Ministry of Finance of Kazakhstan issue #1 - complete offering results

/IRBIS, March 29, 01/ - Today the Ministry of Finance and the National Bank of Kazakhstan held the 1st auction for MEIKAM-48 floatation (1,456 days). Size of satisfaction of noncompetitive applications is 50% of specified amount. Following are complete offering results. Type of the securities MEIKAM-48 NSIN KZ3GL2803A50 KASE trade code MOM048.001 IRBIS registration number 1i/48 Par value, KZT 1,000.00 Auction date March 29, 01 Payment day (till 11:00AM Almaty time) March 30, 01 Circulation start date Apr. 2, 01 Maturity date March 28, 05 Days in circulation 1,456 Planned volume, mln KZT 400.0 Number of primary dealers 7 Demand, mln KZT 1,632.5 Max. fixed yield on demand, % APR 25.00 Actual volume, mln KZT 400.0 Set up fixed yield, % APR 7.00 Coupon payments on these securities will be paid on: July 6, 01; Oct 5, 01; Jan 7, 02; Apr 5, 02; July 5, 02; Oct 7, 02; Jan 7, 03; Apr 7, 03; July 7, 03; Oct 7, 03; Jan 7, 04; Apr 7, 04; July 7, 04; Oct 7, 04; Jan 7, 05; Apr 7, 05. The Ministry of Finance informs that non-residents did not submit any bids at the auction. Big volume of free tenge on the market and the deficit of existing financial instruments predetermined the success of the Ministry of Finance at the offering of his new indexed bonds. At current inflation rate of 3.1% for the last three months (1.3% in December, 1.1% in January, 0.7% in February), actual yield of issued MEIKAM will equal 19.4% APR for the first coupon. The closest in circulation term bonds, MEOKAM-36, give only 10.5% APR. There is another estimate. Based on the forecast of the National Bank, in 2001 the inflation will equal 6-8% in Kazakhstan. By taking average of 7%, presumable coupon of MEIKAM-48 can be found at 14.0% APR. This figure is more beneficial relative to current yields of other GB. Therefore, a great demand for new bonds. It should be noted that fixed rate offered by the Ministry of Finance at 7.0% APR seems to be balanced today and quite interesting to provide a high demand for lengthy indexed bonds.