Bank TuranAlem OJSC (Kazakhstan) will have issued eurobonds, ADR/GDR by May

/REUTERS, Almaty bureau, Alexey Kalmykov, Apr 2, 02/ - One of three largest banks of Kazakhstan TuranAlem intends in the end of April-beginning of May issue eurobonds for approximately $150 million with circulation term from three to five years and in may float ADR and GDR for 29.9 percent of common shares, said the Managing director of the bank Nurlan Talkenov. "We want to attract in average $150 million... The market is very good now," said Talkenov at a press conference. The bank will become the next Kazakhstan's issuer trying to use favorable market conjuncture of eurobonds of developing countries, where prices of sovereign bonds of Kazakhstan - the first state of CIS admitted by the USA as a country with the market economy, - have grown noticeably after the default of Argentine with respect to debt. The bank 25 per cent of shares of which belongs to the large international financial institutions issued three-year eurobonds for $100 million on June 28,2001. The yield at the bonds floatation of the bank having extremely high rating for credit organization of CIS totaled 11.5% APR. Talkenov said that the yield of a new issue would be determined by the market, however, saying about the interest of investors to Kazakhstan's securities he mentioned recent issue of eurobonds of state company Kazakhoil that issued in February five-year bonds with coupon at 9.0% APR with price at 99.033 percent of par value. Kazakhoil postponed the issue because of the merge with another state company - Oil and gas transport. According to Talkenov, the lead-manager of eurobonds issue is Deutsche Bank. Road show of new securities will take place in Europe and the USA in the second half of April. He added that the bank tries to organize the admittance of Kazakhstan investors and first of all, of pension funds to primary floatation through Kazakhstan stock exchange. THROW TO THE WEST Based on Talkenov's words, the banks also has active consultations with international rating agencies and expects that Standard & Poor's that gave to the bank a rating "B" with positive forecast and also Moody's that defined deposit rating of TuranAlem at the level of "Ba3" and rating of its eurobonds at "Ba2" soon will confirm their grades. Talkenov complained that there is a lack of analytical information about the bank for the western investors and called hitting this target as one of the main objectives of coming issue of American and global depository receipts (ADR/GDR) on common shares of the bank. The receipts will be issued after the approval of the project by the shareholders at the meeting on April 29 and will pass through the listing in Frankfurt and Berlin. "We'll also consider a necessity of the listing whether in Luxemburg or Toronto," added Talkenov. The lead-manager of the issue has been determined as Kazakhstan Company Visor Investment Solutions and tender for international underwriter hasn't been completed yet. The issue of the receipts will be a step forward more ambitious plan - additional issue and direct listing of the bank's shares at one of the north American exchanges. "It will be whether Toronto or NASDAQ in New-York. Direct listing. At least - ADR of third level," said Talkenov. NEW CREDITS According to Talkenov, the issue at the end of last year of almost 25 percent of convertible privileged shares among foreign banks, including EBRD and Raiffesen Bank, and also receiving in September of syndicated loan for $67.5 million from 16 banks organized by ING Barings started a process of "internalization" of TuranAlem bank. "There has been made a good basis for new attractions and further internalization of our bank," he said. In particular, the bank has already received a suggestion to expand abovementioned credit line for financing of trade transactions of the clients. The bank has agreed with Raiffesen Bank that owns more than nine percent of shares of TuranAlem about training of the personnel and exchange with technologies. According to Talkenov, the managers of Austrian "strategic partner" will work at Kazakhstan bank based on temporary contracts for one- one and a half year. Besides, one of new shareholders of the bank - International financial corporation (IFC) - is preparing to present the bank a credit line for five years in the amount of $15 million for financing of media- and small businesses. For the same purposes, according to Talkenov, the bank may attract at the end of the year $10 million for five years from Eurasian bank for reconstruction and development (EBRD) and 10 million euros from another shareholder - German investment company DEG - for term up to seven years. Final decision upon granting these loans will be adopted after the presenting by the bank of its financial reporting for the last yea according to international standards, the audit of which will be finished soon by Ernst &Young. Talkenov said that according to international standards a net income of the bank by results of 20001 will account for about $10-15 million, assets will reach $1.10-1.15 billion, and capital - $110 million. [2002-04-02]