Bloomberg the Company & Products

Bloomberg Anywhere Login


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

BTA to Restructure $11.2 Billion Debt as Samruk Pledges Cash

Don't Miss Out —
Follow us on:
BTA Reaches Non-Binding Deal on $11.2 Billion Restructuring
A logo sits above the headquarters of the BTA Bank in Almaty, Kazakhstan. Photographer: Gabriela Maj/Bloomberg

Oct. 3 (Bloomberg) -- State-run BTA Bank said it reached a non-binding agreement with creditors on restructuring $11.2 billion of liabilities, the Kazakh lender’s second debt overhaul in as many years.

The agreement with the creditors’ committee to swap existing debt for new notes and cash didn’t include Nomura International, according to a statement e-mailed today.

“The bank will receive considerable debt relief from its creditors holding senior notes, recovery units and original-issue discount notes and various classes of subordinated debt,” the Almaty-based lender said in the statement. The deal will “help ensure the viability of the bank.”

While the government denied plans last month to inject cash into BTA, its controlling shareholder, sovereign-wealth fund Samruk-Kazyna, agreed to provide a $1.59 billion interest-bearing loan which is subordinated to the new notes. Including cash and new notes, BTA is offering a payoff of 21.1 cents on the dollar of the $11.2 billion being restructured, according to UBS AG.

BTA failed to make an interest payment on its July 2018 dollar bonds in January and later halted all payments on $5.2 billion of its recovery units, which creditors accepted in 2010 as part of a restructuring accord.

Samruk-Kazyna took over BTA in February 2009, two months before the nation’s largest lender at the time defaulted on $12 billion of debt. BTA, which won 92 percent creditor approval for a restructuring plan in May 2010, initially sought an agreement on its second debt overhaul by September, according to a presentation published on its website.

Sound, Stabilized

“We hope to complete the restructuring by year-end 2012,” Yerik Balapanov, BTA’s chief executive officer, said in the statement. “We believe that this restructuring will provide the bank with a sound and stabilized balanced financial structure going forward.”

The yield on BTA’s defaulted dollar-denominated notes due in 2018 dropped more than 15 percentage points to 36.048 at 2:31 p.m. London time. The yield on the securities soared to 77.4057 percent on June 14, the highest since the notes started trading, according to data compiled by Bloomberg. That compares with the 7.4961 percent, a record low, the bonds were yielding in October 2010.

Samruk’s Aboutface

“Samruk-Kazyna injected cash, and the payout to noteholders is better than expected,” Kathleen Middlemiss, head of European corporate credit research at UBS in London, said by e-mail. “Samruk-Kazyna was always saying they would not inject any cash -- and now they have.”

Based on its business plan and financial model, BTA projects rebuilding its core Tier 1 capital ratio above 10 percent under Basel II after the restructuring and maintaining it through 2016, with profitability restored after 2014, according to the statement.

Samruk-Kazyna will back the deal by converting deposits into bank equity, raising its shareholding in BTA, according to the statement. The wealth fund will also increase the coupon on its bonds held as an asset by BTA and provide a $1.59 billion loan subordinated to the new notes.

The state-owned fund injected 883 billion tenge ($5.9 billion) to raise BTA’s equity capital in 2009 and 2010, the equivalent of about 4 percent of gross domestic product.

Nazarbayev’s Order

President Nursultan Nazarbayev on April 10 told the government and central bank to stabilize BTA. The lender’s capital shortfall may reach about $6 billion by the end of 2012, according to its presentation. BTA in January predicted the gap would reach $5.1 billion by the end of the year.

The biggest energy producer in the former Soviet Union after Russia used $10 billion from its oil fund to support banks and companies after credit markets froze and a property prices collapsed in 2008. BTA, Alliance Bank and Temirbank agreed with creditors’ on discount and extension of payments on about $20 billion of debt after they defaulted in 2009.

In February, BTA said the steering committee includes Ashmore Investment Management Ltd., Asian Development Bank, D.E. Shaw & Co., BNP Paribas SA’s FFTW U.K. Ltd., Gramercy Funds Management LLC, JPMorgan Chase & Co., Nomura Holdings Inc., VR Capital Group Ltd. A seat on the committee is reserved for the Swedish Export Credits Guarantee Board and another one for a representative of trade finance lenders.

Restructuring Accord

According to the terms of the new restructuring deal, creditors will swap existing debt for new notes and cash, BTA said. The bank will issue $750 million of 5.5 percent dollar securities due in 2022.

As part of the debt exchange, senior noteholders will receive $957.8 million of cash and $88.8 million of new notes, recovery unit holders will get $660.2 million of cash and $61.2 million of new notes and original issue discount noteholders will receive $600 million of new notes.

The amount to be paid to holders of subordinated notes will be determined by BTA and wouldn’t “alter or reduce any entitlements deliverable to other creditors,” the bank said.

BTA also agreed with lenders providing the $348.2 million Revolving Committed Trade Finance Facility to extend its maturity until Dec. 31, 2015.

In addition, the “lenders have agreed to modify the eligibility criteria to facilitate increased utilization of the RCTFF,” the bank said. “This will enable BTA to finance new and profitable lending in accordance with its business plan.”

To contact the reporter on this story: Nariman Gizitdinov in Almaty at

To contact the editor responsible for this story: Stephen Voss at

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.