AO Alliance Bank, Kazakhstan's fifth-biggest lender by assets, plans to raise a further $2 bln this year through loans and bonds, defying government attempts to restrict foreign borrowings.
The Almaty-based bank will raise „about $2 billion, mostly through syndicated loans” abroad, said Zhomart Yertayev, chairman of the board, in a statement on Alliance's Web site. Loans in the former Soviet state have expanded at least 60% a year since 2004 as oil-led economic growth drives debt demand from corporations and consumers. Kazakh-based banks have borrowed more than $4 billion this year. Alliance's assets tripled last year. Kazakhstan will impose restrictions on the debt banks raise abroad from April 1 because of concerns about an imbalance between banks' assets and the foreign debt they take on. Kazakh lenders have to borrow abroad because the domestic market isn't big enough to satisfy their funding needs, according to Fitch. Kazakh banks „need a lot of financing this year as they are growing very quickly and they need to refinance their maturing debt,” said Alexei Kechko, a Kazakh specialist at Fitch Ratings.
Alliance sold €750 million ($983 million) of five-year bonds and £250 million ($482 million) of four-year bonds last month. Alliance's euro-denominated 7.875% bonds maturing in 2012 yield 8.771% or 492 basis points above US treasuries of similar maturity. Kazakhstan's $78 billion economy has grown at an average 10% a year since 2000 because of high international oil and natural-gas prices. The country has 3.3% of the world's proved oil reserves and 2% of its natural gas. Moody's Investors Service rates Alliance at Ba2, two steps below investment grade. Fitch rates the lender at BB-, three levels lower than investment grade. (Bloomberg)