Halyk Bank Plans $500 Million Bond Sale to Cut Deposit Reliance

Dec. 8. Bloomberg

By Nariman Gizitdinov

Halyk Bank Plans $500 Million Bond Sale to Cut Deposit RelianceHalyk Savings Bank, the lender controlled by Kazakh President Nursultan Nazarbayev’s daughter and son-in-law, said it may sell as much as $500 million in Eurobonds in the first half of next year to diversify funding.

The lender’s plans to sell $300 million to $500 million of bonds will depend on the funding costs, Ermek Koichebayev, a spokesman for the Almaty-based bank, said in a phone interview today. The bond sale will allow the bank to generate funds that are cheaper and longer term than deposits, he said.

Halyk, Kazakhstan’s third-largest lender by assets, said it repaid two syndicated loans in October of $400 million and $300 million. Those loans had been due in April and September next year. The next debt repayment is $300 million in bonds maturing in 2013, the lender said in an e-mailed statement today.

The bank said last month net income halved in the first nine months of the year to 9.1 billion tenge ($61.2 million) as it set aside more cash to cover bad loans. Liabilities to customers increased to 1.33 trillion tenge in the first nine months, or by 54 percent from the start of this year, it said.

BTA Bank, the largest Kazakh lender to default this year, signed a non-binding agreement with creditors yesterday to restructure at least $12 billion of debt.