Kazakhstan's Kazkommertsbank: liquidity OK; future issuances possible

By Jennifer Lanning Drey

Savannah, Ga., May 31 - Kazkommertsbank now has sufficient liquidity to cover forthcoming redemptions until 2016 but would not rule out further debt issuances, Sergey Mokroussov, Kazkommertsbank's president, said Monday during the company's earnings conference call for the first quarter.

On May 12, Kazkommertsbank settled $300 million of seven-year eurobonds with an 8½% coupon.

When asked during the question-and-answer session about Kazkommertsbank's future debt issuance plans, the bank's management said it had no immediate plans for future debt issuance but would not rule out trying to access the markets again to refinance some of its upcoming maturities.

In the recent issuance, the bank focused on price versus size, Mokroussov said.

"We have chosen to pursue a low price and low cost of funding in the future as opposed to a bigger size of the deal," he said.

Kazkommertsbank's $358 million of redemptions due in 2011 can be "comfortably accommodated" with the bank's current holding of liquid assets, Mokroussov said during his formal remarks.

The bank's liquid assets currently stand at $3.1 billion, which is sufficient to cover forthcoming redemptions until 2016, he said.

"This is a good position to be in, allowing the bank's management to focus primarily on structural and strategic deployment of liquidity," Mokroussov said.

He also later noted that the bank's current capital base also provides a cushion against potential pressure or prospective regulatory requirements.

Kazkommertsbank's profit before tax in the first quarter of 2011 increased to KZT 7.5 billion from KZT 3.4 billion in the first quarter of 2010. Net profit after tax grew by 6% to KZT 5.9 billion from KZT 5.6 billion for the same three months in 2010.

Kazkommertsbank is an Almaty, Kazakhstan-based lender.

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