Fixed Income Analysis /

Weekly credit risk monitor

    Tellimer Research
    23 June 2017
    Published byTellimer Research
    Credits in Focus: Halyk & KKB: Signed, sealed and (almost) delivered
    Our views have not changed: We reiterate our Sell recommendation on the Halyk (HSBKKZ) 7.25% 2021 and the Kazkommertsbank (KKB) 5.5% 2022 bonds. As mentioned in our previous note, we think most of the price appreciation on the KKB bond is now behind us. On Halyk, given the bank’s best-in-class fundamentals, we still think it is difficult to construct a scenario in which a combination of Halyk with KKB looks better than a standalone Halyk. The key risk to our view on KKB is liability management (such as a tender offer), which may well form part of plans to ‘optimise’ funding costs at KKB following the transaction.