Kazkommertsbank JSC (Kazakhstan) concluded euronotes offering for $400 m

/IRBIS, Assel Omarova, April 7, 04/ - Kazkommertsbank JSC (Almaty), whose securities are listed under "A" category of Kazakhstan Stock Exchange Inc., released an announcement today, in which informs about wrapping up of 10-year euronotes offering for $400 m. Citigroup and ING were mandated as lead managers. Closing of a deal and proceeds from investors were collected on April 7, 2004. Notes with 7.875% coupon were floated at 8.11% per annum. Euronotes offering was preceded by issuance of subordinated notes by Kazkommertsbank JSC for $100 m on April 1, coupon rate 7.375% p.a. Thus, the Bank managed to attract $500 million within a couple of days. Total bids formed more than $1 bn, where $600 m fell on the stake of senior debt. Thanks to successful road show, the issue became the largest ever done by local banking sector. "Interest rates in international markets are currently at historical lows, under such circumstances KKB had to borrow for as long as possible and we managed to do so", Andrey Timchenko, managing director of Kazkommertsbank JSC commented on a deal. As Timchenko explained, due to favorable factors demand for debt securities issued by KKB remains high among investors, allowing bank to borrow at historically low rates for the second year in a row. Road show took place in Singapore, Hong Kong, London, Boston, Los Angeles and New York. According to KKB, international bonds and notes are one of those few tools used to finance Kazakhstani enterprises for such a long term and with such large amounts. The Bank also highlights that there is a typical duration gap problem since most of deposits collected from private clients are demand deposits with average maturity up to 18 months. Such deposits are as costly as eurobonds/euronotes issues, while international longer term borrowings significantly diversify Bank's portfolio and help to sustain a competitive advantage. Proceeds from last year bonds offering replenished Bank's loan portfolio and were used to finance long term projects. World's leading ratings agencies Moody's, S&P and Fitch rated expected euronotes at 'Baa2', 'BB-' and 'BB', respectively. [2004-04-07]