Kazakhstan’s third-biggest lender, BTA, formally defaulted on its debt for the second time last month, derailing what was the biggest-ever emerging market corporate debt restructuring. A grace period ended on January 18 after the bank missed a $160 million interest payment on its $2 billion Eurobond due 2018. The default comes just 18 months after creditors signed up to an initial restructuring, with a 70% haircut on $16.6 billion in debt after its first default, in 2009.
BTA has so far failed to win up-front shareholder approval for another restructuring: holders of the bank’s global depositary receipts voted against such a resolution in Almaty on January 26. But BTA, whose chief executive, Marat Zairov, resigned last month, says it is still pursuing a restructuring.
As Euromoney went to press the bank was setting up a formal steering committee, advised by Lazard and law firm White & Case.
The new default is a harsh blow for creditors. In a press release on January 12 an ad hoc creditors’ group said that the National Bank of Kazakhstan and the $90 billion sovereign wealth fund Samruk-Kazyna were both responsible for what the group called an inexcusable situation.