BTA Bank Bonds ‘Everyone Loves to Hate’ Slide to Record Lows

Bonds of BTA Bank, the Kazakh lender that defaulted on its debt in 2009, slid to a record low on concern about the company’s debt and after a regulator said it lost money so far this year.

The yield on BTA’s dollar-denominated notes due in 2018 jumped 66 basis points, or 0.66 percentage point, to 14 percent today, the highest since the bond started trading in September and the biggest advance in more than a week, data compiled by Bloomberg showed. Dollar-debt maturing 2025 also plunged, pushing the yield up 62 basis points to a record 15.47 percent by 9:56 p.m. in Almaty, the Kazakh financial capital.

BTA is the credit “everyone loves to hate,” James Croft, the head of emerging-market fixed-income trading at Mitsubishi UFJ Securities in London, said by e-mail today. “The 2018 bond is getting hit the most.”

The Almaty-based bank, which went from being Kazakhstan’s largest to number three during the credit crisis, posted a 7.6 billion tenge ($52 million) loss in the first four months of the year, the former Soviet republic’s financial regulator said May 23. BTA said its liabilities exceeded its assets by 105 billion tenge at the end of last year, according to a 2010 earnings report published May 12 prepared to international standards.