Kazakhstan's Temirbank wins noteholder, creditor OK for restructuring

By Caroline Salls

Pittsburgh, March 31 - JSC Temirbank's restructuring plan was approved by holders of the bank's $300 million of 9% senior notes due 2011 and $500 million of 9½% senior notes due 2014, according to a news release.

Specifically, 94.67% of the 9% noteholders voted in favor of the plan, as did 91.49% of the 9½% noteholders.

As a result, the notes trustee was instructed to vote the full outstanding amounts on each series of notes at a creditors meeting that was held on Wednesday. According to a separate release, the plan was also approved at the creditors' meeting.

Under the current plan, noteholders will receive cash, 20% of the bank's common shares and new notes. The shares will be held directly or through a special-purpose vehicle.

The cash amount will be 19.701% of par for the 9% notes and 20.02642% of par for the 9½% notes and includes accrued interest.

The bank expects that the restructuring will be completed in the third quarter after it receives final approval from the FMSA and the Specialized Financial Court of Almaty.

Once the restructuring is completed, Samruk-Kazyna will provide equity funding to Temirbank and become the bank's majority shareholder.

Treatment of other creditor obligations under the plan includes:

• Holders of domestic secured bonds issued by the bank will receive new Kazakh tenge-denominated secured domestic notes in exchange for 25% of the principal amount held. The coupon of the new notes will be 100 basis points over the domestic consumer price index, subject to a floor of 8% per year and a cap of 12% per year.

The remaining 75% of the principal amount of secured bonds will be amended to fix the coupon at 8% and to extend the maturity by 10 years. They will become unsecured and, if not already applicable, repayable in tenge;

• Domestic unsecured bonds will be amended to fix the coupon at 8% and to extend the maturity by 10 years. If not already applicable, they will become repayable in tenge;

• Deposits placed by BTA Bank will be modified to extend their duration by 10 years, to reduce the coupon to 8% and to convert any amount due in a currency other than tenge into tenge;

• Deposits placed by Samruk-Kazyna will be extended by six months;

• Amounts outstanding under the bank's compromised trade financing will be exchanged for a bilateral 2% loan that will be payable in a single bullet after 10 years; and

• Any default interest will be deemed satisfied in full or written off.

Temirbank is a financial institution based in Almaty, Kazakhstan, and a subsidiary of BTA Bank.

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