BTA Bank Said to Pitch Debt Restructuring Proposal by Year-End

Kazakhstan’s BTA Bank may ask shareholders and creditors to consider its second debt restructuring before year-end, according to two people familiar with the matter, Bloomberg reported. The people didn’t give details of the plan and declined to be identified because the information isn’t public. Lazard Freres & Co., which acted as an adviser to BTA during its debt reorganization in 2009, assessed the cost of another restructuring last month, two people with direct knowledge of the matter said last week.Kazakh sovereign-wealth fund Samruk-Kazyna took over BTA in February 2009, two months before the nation’s largest lender at the time defaulted on $12 billion of debt. The state holds an 81.5 percent stake in BTA, which won 92 percent creditor approval for a restructuring plan in May 2010. The bank said in September it has a $150 million coupon payment due in January. Fitch Ratings lowered BTA’s debt score one step to CCC from B- on Nov. 14 because of the “increased probability of BTA’s default in the near to medium term” and Standard & Poor’s withdrew the bank’s ratings four days earlier. The lender faced a capital shortage of 162 billion tenge ($1.1 billion) under international accounting standards as of Nov. 1 after it set aside more money to cover souring loans, according to a statement e-mailed Nov. 28. The bank has a total of $5.2 billion of debt, Bloomberg data show. Read more.