OREANDA-NEWS. On November 14, 2007 Kazakhstan Bank of Development JSC (Astana), securities of which are traded in the official category "A" listing of Kazakhstan stock exchange (KASE), has furnished KASE with a press release, saying, reported the press-centre of KASE:

The decision about carrying-over the term of the fifth issue of Eurobonds of KBD was taken on November 7 of 2007 by the end road-show of Kazakhstan Bank of Development JSC that was held in Germany, Great Britain and the U.S.A. Despite of positive perception of the KBD's positions by investors and the issue's parameters, the general situation in the banking sphere of RK and its susceptibility to the impact of the global credit crisis evokes their anxiety. The series of billion losses and resignations in the banking world, decrease in rating of a number of Kazakhstani banks, and also considerable deterioration of state of global stock markets as of the moment of pricing have led to the sharp growth of credit spreads.

Despite of demand, the bank considered unsuitable the floatation of bonds on these conditions and postponed the date of their issue. The given issue is planned and meant to finance investment projects of 2008.

Comments of the President of Kazakhstan Bank of Development JSC - Zhanat Zhakanov

"We have no need in urgent borrowing of money on any terms. First, the macroeconomic situation in Kazakhstan, its economic and financial resources and also price conjuncture do not give any ground for feverish borrowing "at any price". Second, the negative processes in the banking sector did not affect stability and liquidity of KDB. We have the resources, needed for projects of year 2007, and we raise additional loans for projects of year 2008 on more acceptable conditions".

Suggestions leading managers of the issue - Deutsche Bank and JP Morgan were based on operational analysis of markets and study of investors' opinion. Simultaneously, at the time, eight similar deals were postponed on markets.

In its decision, the Bank has also taken into account the possible consequences of the issue for Kazakhstan banking system. High benchmark, set while bonds' floatation with quasi-sovereign status, would increase significantly the cost of borrowings for all Kazakhstani issuers. Both regulating financial organs of RK and a number of commercial banks talked about such threat.

Comments of the Vice-president of Kazakhstan Bank of Development JSC - Anar Omarova

"Probably, a commercial bank would be able to issue overpriced bonds, having created a benchmark that would close the market for others. We have refused from the expensive borrowing and by that left the access on foreign markets open for all Kazakhstani banks and issuers. The deal will be restarted with stabilization and improvement of market conditions".