Development Bank of Kazakhstan CJSC has got status of financial agency

/KASE, August 4, 03/ - On July 25 of 2003 National Bank of Kazakhstan assigned to Development Bank of Kazakhstan CJSC (Astana, hereinafter DBK) the status of financial agency. The official notification, which the bank presented to Kazakhstan stock exchange (KASE) today, says about it. The notification says that according to the law "About securities market" dated July 2, 03 financial agency is a bank or an organization, which render certain types of banking operations, which have been authorized in compliance with the legislation of the Republic of Kazakhstan for realization of the state investment policy in certain spheres of economy and make borrowings with these purposes at the financial market of Kazakhstan and (or) international financial market. Bonds, which are issued by financial agent inside the country and outside it, are agent ones. Major activity of DBK (in compliance with the law "About Development Bank of Kazakhstan CJSC") is mid- and long-term crediting the real sector of the country's economy. At that, funds of DBK's authorized capital can not be used by it for crediting investment projects. Thus, sources of for financing investment projects of DBK are borrowed funds, which are attracted by the bank at domestic and foreign market of loan capital, and also budget credits from the republican and local budgets. One of the main sources of credit operations funding of DBK is eurobonds issues. In accordance with the formed practice of borrowing by residents of the Republic of Kazakhstan of this type of bonds, the issuer by itself pays income tax at the source of payment from revenues, which investors receive. Rate of this tax is 15 % of the paid interest, that significantly increases cost of this borrowing. In compliance with tax legislation of Kazakhstan revenues from operations with agent bonds are not liable to income tax at the source of payment. This fact significantly increases attractiveness of agent bonds of DBK for their potential holders. Taking into account the mentioned, assigning of the status of financial agent and exempting from taxation holders of DBK's bonds lets bank decrease the cost of borrowing and, correspondingly, the rate of projects crediting. Besides, assigning of status of agent bonds to DBK's bonds in presence of investment rating from Moody's Investors Service иand the rating on the level of sovereign one from Standard&Poor's equals the bank's bonds to government securities. "The bank, being one of the first development institutions, which have been founded by the government, strives for realization of the strategy of industrial- innovative development of the Republic of Kazakhstan. Obtaining of the status of financial agent will let the Bank effectively realize major tasks of the Bank - borrowing of foreign and domestic investments to the country's economy, mid- and long-term crediting non-raw stuff sectors of Kazakhstan economy", - the notification says. [2003-08-04]