Kazakhstan's NIT repays 20 per cent of two bonds and pays their coupons

National Information Technologies (NIT), Kazakhstan's state-owned information technology company, paid about KZT 5.6 billion to bondholders on 11 September, covering coupons and the first 20 per cent principal instalments on two amortising bond issues, its notices to the Kazakhstan Stock Exchange show.

The two bonds carry fixed coupons of 15.57 per cent and 18.33 per cent. On the larger issue, NITCb2 (ISIN KZ2C00015253), NIT paid a second coupon of KZT 1,167,750,000 and redeemed KZT 3.0 billion of face value, 20 per cent of the principal, the company's letter to the exchange shows. The coupon is fixed at 15.57 per cent a year for the life of the bonds and is paid twice a year. On those figures the issue's original principal was KZT 15 billion, and KZT 12 billion remains outstanding after the instalment.

On the smaller issue, NITCb3 (ISIN KZ2C00015279), it paid a second coupon of KZT 449,085,000 and redeemed KZT 980 million, also 20 per cent of principal, the second letter shows. That bond's fixed coupon is 18.33 per cent, which implies an original principal of KZT 4.9 billion, of which KZT 3.92 billion remains.

How the bonds amortise

Both prospectuses provide for repayment in equal 20 per cent instalments, the first after the end of the second coupon period and then every 12 months from the start of circulation for the rest of the term, the letters show. The face value of each bond is KZT 1,000. The September payment was the first instalment on each issue, the KASE summaries of the NITCb2 and NITCb3 redemptions show.

Adding the four amounts, NIT paid KZT 1,616,835,000 in interest and KZT 3,980,000,000 in principal, a total of KZT 5,596,835,000, on the company's own figures. The exchange's separate coupon notices for NITCb2 and NITCb3 record payment on 11 September; the second notice refers to the NITCb2 ISIN in its text, an apparent error in the exchange summary, while the company's letter gives the NITCb3 figures.

The gap of 2.76 percentage points between the two fixed coupons is not explained in the filings, which do not give the issue dates, the investors or the use of proceeds. The letters are signed by the company's managing director for finance.

Who owns NIT

NIT's sole shareholder is the Government Property and Privatization Committee of the Ministry of Finance of Kazakhstan, which holds all 57,835,401 authorised and outstanding common shares, a shareholder disclosure as of 1 July shows. The company's board elected A.M. Ibraev as deputy chairman of the management board on 24 August, leaving a five-member management board, a KASE notice says.

With 20 per cent of each issue repaid, the remaining principal on the two bonds is KZT 15.92 billion. On the prospectus schedule set out in the letters, the next instalments fall due 12 months after this one, alongside the semi-annual coupons. Because the bonds amortise, coupon payments will fall as principal is repaid, so the September payments are likely to be among the largest the company makes on these issues.

On the stated terms, and assuming no early redemption, the next semi-annual coupon would be about KZT 934 million on NITCb2 and about KZT 359 million on NITCb3, a calculation from the coupon rates and remaining principal in the two letters. At a face value of KZT 1,000, the original issues amounted to 15 million and 4.9 million bonds respectively.

Other Kazakh telecom and IT issuers are also active on the exchange. Transtelecom has called a meeting of holders of its TCOMb1 bonds for 30 October with an agenda that includes amending the coupon rate, according to a KASE notice.