CIS Credit Monitor: Gazprom, BTA, Temirbank

In this issue:


Gazprom changes its mind about Gazpromneft option
BTA and Temirbank rating downgrade, BTA conference-call
Gazprom (BBB/A3/BBB) changes its mind about Gazpromneft option
Today’s morning press discusses Gazprom, which is according to unofficial sources preparing to exercise the option to purchase 20% of Gazpromneft and Yukos gaz assets from Italian Eni and Enel. The official announcement should be done during the visit of Italian PM Berlusconi to Moscow on 6-7 April. Enel and Eni representatives are expected to join the PM delegation. The deal is estimated to be worth over $5.5bn in total: c.$4 bn for 20% Gazpromneft shares and c.$1.5 bn for former Yukos assets (51% of Severenergia). Major part of funding will be provided by state banks in terms of loans. According to Kommersant newspaper c. ?2bn might be granted by Sberbank, and Gazprombank and Russian Agricultural bank should lend ?600m each ($4.3bn in total). We believe that Gazprom bonds are an attractive alternative to Russia’s sovereign risk. We believe that the risk of deferred Eurobond supply from Gazprom is high and is already reflected in the spreads. The need to refinance the loans for Gazpromneft and Severenergia deal will depend on the loan terms which are currently not clear.

BTA and Temirbank rating downgrade, BTA conference-call
Yesterday Fitch downgraded BTA and Temirbank to CC with Negative credit watch from B+ following the downgrade to CCC+ by S&P last Friday. This means that the agency believes that default on some of the banks obligations is now possible. This followed the statement by Samruk-Kazyna fund that should creditors try to accelerate early repayment the fund may no longer be prepared to provide support to BTA Group and that modifications can be done to BTA debt structure. During yesterday’s conference-call Samruk-Kazyna and BTA representatives once again stated that early repayments will not be executed by the bank. However they still did not bring any valid legal reason for that. They also mentioned that the treatment of creditors will be equal, which means that Eurobond holders will not escape in case of loan restructuring. Financial advisors are still working on the proposals to creditors and no indication was given on the terms of possible future restructuring. In the same time we recall that recently Temirbank 2009 eurobond was paid in full.