Sporadic bursts of activity
Kazakhstan's banking sector has promised much in the way of securitisation, but has so far failed to deliver more than sporadic bursts of activity.
WestLB brought the first international securitisation from Kazakhstan in October 2003, a deal securitising diversified payment rights for Halyk Bank, the country's third largest bank. But there has been no more issuance in the year that has followed.
That $100m deal was structured as a loan from WestLB and has a legal maturity in 2008. It pooled dollar, euro, swiss franc and yen denominated payment rights from 21 international correspondent banks.
A number of banks say that they are in negotiations with lead managers to issue secured deals, with market leader Kazkommertsbank perhaps the most likely to be first to issue. ?We are considering a future flow securitisation and have been discussing this with the EBRD, because under existing agreements, we have some covenants,? says Gulmira Chetinelli, deputy director of financial institutions at KKB in Almaty. ?A securitisation would offer cheap funding and access to a new investor base, with quite an attractive tenor. We would want this to be wrapped by an international insurance company.?
The EBRD's approval is said to be the biggest hurdle for many borrowers looking to issue securitisations. Many of the country's banks in particular have strong relations with the EBRD, making its approval important, but the institution is said to favour other means of financing.
Secured debt would rank senior to any other lending, including the EBRD's own lending, and some bankers believe that it would rather lend directly to the banks itself rather than see them getting wraps from monoline insurers.
There have also been some domestic transactions, including mortgage bonds from both the Kazakhstan Mortgage Co and Lariba Bank for $2m and $1m respectively in 2003.