MINISTRY OF FINANCE OF KAZAKHSTAN CLARIFIED SOME MATTERS REGARDING ISSUE, FLOATATION, SERVICING AND SETTLEMENT OF ITS BONDS

/IRBIS, June 4, 01/ - Today the Ministry of Finance of Kazakhstan distributed a message (hereafter - Clarification), containing major clarifications regarding some matters on issue, floatation, servicing and settlement of its government securities, thus, eliminating the vagueness that arose after the enactment of the resolution #437 of the Government of Kazakhstan "On making changes and amendments to some of the decisions made by the Government of Kazakhstan", dated June 2, 01. As it has been informed before, through this resolution changes and amendments were made to issue, circulation and settlement rules of almost all domestic securities of the Ministry of Finance. The most principal change was the introduction of a new calculation base for the yields of the bonds: actual/365 instead of actual/364/ When preparing the clarifications, the Ministry of Finance showed an interest in the problems that arose on secondary market of GS. Upon making the draft of the Clarifications the issuer took into consideration the wishes of the professional market participants, by cooperating with the Kazakhstan Stock Exchange (KASE) and Central Depository of Securities CJSC (CDS). In its Clarifications the Ministry of Finance emphasized on the fact that the changes and amendments, which were approved by the abovementioned resolution of the Government, apply only to the securities that began circulating from April 2, 2001. The bonds issued earlier are serviced based on old rules. Ministry of Finance clarified all the matters that arose on the secondary market of GS due to different number of days in even and odd coupon periods of MEOKAM. Particularly, it was said that the coupons of Ministry of Finance bonds are structured based on 182 days in each odd coupon period and 183 days in each even period. When informing the market on the parameters of planned MEOKAM issues, the Ministry of Finance and the National Bank, as its financial agent, will indicate calculation dates of coupon payments and bond settlements (structure of the securities). If calculation date of the coupon on MEOKAM payment falls on the non- business day (such case is provided for in the Government's resolution), then the coupon is paid by the Ministry of Finance on the first business day after the non-business day. For MEIKAM the Ministry of Finance always announces actual payment dates. The matter on the amount of accumulated coupon on MEOKAM per circulation day, as well as the amount of coupon payments on even and odd periods are settled. Particularly, the Clarifications read that the amount of accumulated interest is calculated on the basis of dates announced by the Ministry of Finance, that is, based on the structure of the bonds, and not on actual payment dates. The amount of a coupon accumulated per day of circulation is a constant for a certain type of the securities, which is calculated based on the coupon rate that settles at the auction and circulation term of the bonds, divisible to 365. Here, it means that coupons on odd and even coupons on the same issue MEOKAM will be different due to various numbers of days in odd and even coupon periods. This principle should be applied when calculating the accumulated interest on MEIKAM with the adjustments to "floating", depending on current inflation, coupon. In Clarifications the Ministry of Finance gave an important detail, regarding the circulation mode of all coupon bonds issued by the Ministry: the circulation stops 5 business days prior to the coupon payment date due to fixing the register at the CDS. The circulation resumes on the next business day after the coupon payments were made. The Ministry of Finance also reminded, that the circulation of any bonds, issued by him, stops 5 business days till their maturity. The Clarifications were dated June 4, 2001 and signed by the vice-minister A.Dunaev.