Kazakhstan's Temirbank to pay early voting payment to all noteholders

By Angela McDaniels

Tacoma, Wash., Dec. 15 - JSC Temirbank said it will pay $10 per $1,000 principal amount to all holders of Temir Capital BV's $300 million of 9% senior notes due 2011 and $500 million of 9½% senior notes due 2014 if its restructuring plan is successfully carried out.

The payment represents the early submission payment that was previously offered only to holders who voted on the company's proposed restructuring plan by the Dec. 15 early submission deadline. The bank decided to make the payment to all holders, regardless of whether they vote.

Holders of record on the date of the noteholder meetings will be eligible for the payment.

The bank noted that Depository Trust Co. direct participants who are holders of the 9½% notes must complete an early submission payment details form and return it to the principal paying agent, the Bank of New York, London Branch, by noon ET on the 30th day following the noteholder meetings in order to receive the $10 payment, provided that holders who have already voted need not take further action.

Under the terms of the proposed restructuring:

• The 9% notes will be satisfied by a cash payment of 19.70% of par, comprised of 14.25% of par, 4.45% of par for interest accrued through Nov. 22 and the $10 payment;

• The 9½% notes will be satisfied by a cash payment of 20.0264% of par, including 14.25% of par, 4.7764% of par for accrued interest through Nov. 22 and the $10 payment;

• The domestic bonds issued by the bank will continue at par but will be amended to significantly extend the maturity date, to apply a reduced interest rate and to partially or fully subordinate the claims;

• Holders of secured domestic bonds will receive new secured notes on 25% of the outstanding instruments, with the balance being converted into unsecured subordinated notes;

• Deposits placed by JSC National Welfare Fund Samruk-Kazyna and JSC BTA Bank will be modified to extend their duration and, in the case of BTA Bank, to reduce the interest rate;

• 37.3% of Temirbank's liability to CoBank ACB under letters of credit issued under trade finance transactions will be written off with the balance remaining outstanding on current terms; and

• Any default interest will be written off.

Upon completion of the restructuring, National Welfare Fund Samruk-Kazyna will provide equity funding to Temirbank and become the bank's majority shareholder.

The bank announced on Dec. 14 that it had proposed a revision to the terms of the planned restructuring of the notes and would discuss a term sheet for the revision with a group of noteholders.

If the noteholders agree, the bank plans to release the term sheet on Dec. 17 and will seek regulatory approval to change the timetable for the completion of its restructuring process. Otherwise, the Dec. 22 noteholder meetings and Dec. 23 creditor meetings will take place as scheduled.

Unless the restructuring timetable is amended, final settlement is expected to occur in the first quarter of 2010.

Temirbank is a financial institution based in Almaty, Kazakhstan.

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