Japan Bank of International Cooperation opened a credit line for Development Bank of Kazakhstan JSC on preferential terms - press- release of Development Bank of Kazakhstan JSC

/Development Bank of Kazakhstan JSC, November 30, 05/ - On November 30 of 2005 in the office of Development Bank of Kazakhstan JSC (DBK) there was held a ceremony of signing the Memorandum about mutual understanding on making Credit agreements on Export banking borrowing and Incoherent two-stage borrowing between DBK and Japan Bank of International Cooperation (JBIC). Kambar Shalgimbayev president of Development Bank of Kazakhstan JSC and Khiroshi Saito Chief executive director of JBIC put their signatures. JBIC confirmed the credit limit for DBK, including a credit line for USD50 m. on presenting incoherent two-stage borrowings. For the first time JBIC opens a credit line for a bank from CIS on presenting incoherent credits on preferential terms: without security for along period (to 19 years) at low interest rates. This became possible due to DBK's high ratings and its reputation. Terms of the two-stage borrowing do not provide for import of goods or services from Japan, as is customary in Japan state bank's practice. The credit line on incoherent two-stage borrowing has been opened with co- financing of Japan commercial bank Mizuho Corporate Bank, stake of which in this deal is 40%. DBK plans to use the credit line of JBIC for financing investment projects on development of seaport infrastructure in Kazakhstan sector of Caspian sea and its effective exploitation, as well as for modernization of main "gates" to foreign markets, development of transport-communication system of Kazakhstan and transportation service market, formation of transit corridors and transportation-logistics lines. Projects financed within these borrowings correspond to state programs of transport branch development and transit-transportation potential of Kazakhstan, and also to State program of development of Kazakhstan sector of Caspian sea. The purpose of Export banking borrowing is financing mid- and long-term projects of DBK's borrowers and its daughter leasing company DBK-Leasing, concerned with import of technologies and equipment from Japan. Advantage of this borrowing is duration of financing terms and preferential terms. The loan is divided into two tranches: А (60%) and В (40%), each of which is given correspondingly by JBIC and by one of Japan commercial banks. Terms of this borrowing must meet requirements of Governing body of Organization of Economic Cooperation and Development (OECD) on export crediting. In particular, amount of each individual loan given within the credit line must be equal to 85% from export contract amount, term of the contract is up to 10 years, redemption is to be made by equal semi-annual payments. Interest is paid by semi-annual payments at the rate: on А tranche - fixed rate CIRR + margin, set by JBIC; on В tranche - floating rate set on the basis of the rate 6-month LIBOR. Development Bank of Kazakhstan JSC was founded on May 31 of 2001. As of November 1 of 2005 the Bank approved for realization 70 investment projects and export operations for a total of about USD1,220 m., with the volume of Bank's participation of over USD664 m. JBIC is a governmental financial institution, which was founded on October 1 of 1999 as a result of merging Export-import bank of Japan and Fund on international economic cooperation. JBIC's activity is directed towards contribution to export from Japan and import to this country. Besides, the bank makes operations on international economic cooperation, gives preferential long-term credits to developing countries, grants and technical support. [2005-11-30]