In November 1997, the EBRD and IFC have signed a USD 450 million loan agreement with the international steel producer LNM Group, which owns the largest steel mill in Kazakhstan, Ispat Karmet. This loan was the first really long-term corporate borrowing for industrial purposes. The objective of the loan package is to meet the capital expenditure needs of one of Kazakhstan’s largest companies. The syndicated loan announced in January 1998 is structured in the following way: there are three tranches of the loan (A, B, and D). The A loan is for USD 200 million, split between the EBRD and IFC (USD 135 million and 65 million respectively). This loan was structured as a 10-year amortising term loan with a 3-year grace period and this part of the financing facility was not syndicated. The B loan is a USD 200 million 6-year amortising term loan with a 3-year grace period. In this portion of the loan, the EBRD and IFC have equal contributions (USD 100 million each). This B loan was scheduled to be syndicated to banks with a USD 50 million 6-year revolving credit facility.

Kazkommertsbank has been one of the largest corporate borrowers with its USD 100 million eurobond issuance and a number of syndicated loans arranged during the last few years. To this end, Kazkommertsbank is the key Kazak corporation in terms of attracting medium and long term foreign capital to finance the national economy.

The first syndicated loan for Kazkommertsbank was signed in July 1997, when the Bankers Trust arranged a medium-term syndicated loan worth USD 30 million. This loan was initially provided for six months and has been extended twice. Now it is due on 8 January 1999 and USD 10 million has already been repaid. The interest rate was initially fixed at the level of LIBOR+4% and in summer 1998 it was decreased to LIBOR+3.75%.

In November 1997, ING Barings and Commerzbank arranged a USD 50 million syndicated loan for Kazkommertsbank at a rate of LIBOR+3%. Another loan was arranged by the same banks in April 1998. This is a USD 35 million loan for 1 year at LIBOR+3.75%.

HSBK has been an active participant on the syndicated loan market since December 1997 when it received a syndicated loan. The loan initially was for USD 30 million, but because of high demand the amount was increased to USD 40 million. The objective of the loan was to finance trade, specifically to provide a pre-export facility. The term was for 3 months, LIBOR+ 250 bps, with an option of extending for three more months. This option was, in fact, exercised by the bank. This rate was the lowest ever rate obtained by a CIS company on an unsecured facility.