BTA Bank Drops Out of KazPrime to Restructure Debt

July 30. Bloomberg

By Nariman Gizitdinov

BTA Bank, Kazakhstan’s biggest lender, said it “temporarily” won’t participate in determining the country’s interbank offered rate while it restructures its debt.

BTA’s decision not to contribute to setting the KazPrime rate is effective from Aug. 6, the lender said in a statement to the Kazakhstan Stock Exchange today.

“BTA Bank can’t fulfill some of the requirements,” Adil Dosymov, a spokesman for the Almaty-based lender, said in a telephone interview, without providing further details.

BTA Bank is offering creditors $1 billion to buy back debt as part of a restructuring plan after it halted principal payments on its obligations in April. The bank has said it was unable to service its debt commitments earlier this year after creditors demanded immediate repayment following the government’s February takeover.

BTA wants to persuade creditors to settle for between 20 percent and 45 percent of what they’re owed, including trade financing, and as little as between 3 percent and 34 percent without trading financing. BTA has said it needs to restructure more than $12 billion in debt.

The Kazakhstan interbank offered rate, or KazPrime, shows the interest rate available to banks that enjoy the country’s “best credit quality,” according to the stock exchange. The minimum volume a bank can quote is 150 million tenge ($1 million).

KazPrime was launched in March 2007 by BTA Bank, Kazkommertsbank, Halyk Savings Bank, HSBC Bank Kazakhstan, ABN AMRO Bank Kazakhstan – now RBS Kazakhstan, and Citibank Kazakhstan. Citi Bank left the group on July 28, saying it couldn’t fulfill the requirements to participate, while UniCredit SpA’s ATF Bank joined in May last year.