Kazakhstan has redeemed five-year eurobonds for $350m in full volume - Ministry of finance

/Almaty bureau REUTERS, October 2, 02/ - Kazakhstan has entirely redeemed eurobonds for $350m, which had been floated in 1997, informed a representative of the Ministry of finance on Wednesday to Reuters. "The redemption was made in full volume", - she said over telephone having given no more details. Before the National Bank informed that $210m of total volume of eurobonds, which were to be redeemed, as the result, would come to domestic market: the main part of government eurobonds were purchased by Kazakhstan investors - pension funds and banks. On Wednesday a representative of the National Bank specified that pension funds had invested $111.377m into five-year eurobonds of Kazakhstan. In 1999 Kazakhstan issued five-year eurobonds for the amount of $300m, and in 2000 - seven-year eurobonds for $350m. International rating agency Moody's in September of 2002 upgraded sovereign investment rating of Kazakhstan to "Ваа3" from "Ва2". Kazakhstan, which's economics has preferred source of raw stuff, has also been assigned ratings "ВВ" by agencies FItch and Standard&Poor's. The Government did not give any information yet about plans of new eurobonds issue, but deputy Minister of economics and budget planning Arman Dunayev, who spoke at presentation of eurobonds of Development bank, did not exclude the possibility of refinancing of sovereign eurobonds with maturity date in 2004, volume of which equals to $300m. Before, in Dunayev's opinion, Kazakhstan will not issue new eurobonds. "JUDGEMENT DAY" HAS COME In the opinion of Kazakhstan traders, the main substitution for redeemed sovereign eurobonds will be eurobonds of the State development bank of Kazakhstan and the largest private Kazkommertsbank, and also three-, four- and five-year domestic bonds of the Ministry of finance. In September Development bank floated five-year eurobonds for $100m with the yield of 7.375% APR. This was the first eurobonds issue of the bank, wahd been founded last year for financing mid- and long-term projects in non-raw stuff sector of Kazakhstan economics. Demand for eurobonds of the issue, to which rating "ВВ" was assigned by agency S&P and "ВВ-" - by Fitch, equaled to $300m. The bonds became the first issue within the framework the program of borrowings for $400m, which was approved by the bank for 2002-2005. Till the end of 2002 the Ministry of finance of Kazakhstan intends to float at domestic market bonds for the amount of KZT17.3bn with circulation term of from one to six years. Kazakhstan dealers with pessimism expected the planned eurobonds maturity date - October 2 - and called it "judgement day", hinting, that it would bring significant decrease of profits. According to forecasts of market's participants, taking into account growth of the country's ratings, yield of all new instruments will be lower than the one, which was at the market till the moment. [2002-10-02]