Kazakhstan's Zhaikmunai swaps issuer for 7 1/8% notes due 2019

By Toni Weeks

San Luis Obispo, Calif., April 23 - Zhaikmunai LP announced it will substitute Zhaikmunai LLP for the original issuer, Zhaikmunai International BV, of the company's $560 million of 7 1/8% notes due Nov. 13, 2019.

According to a press release, this issuer substitution was planned at the time the notes were issued, which was Nov. 13.

Shortly after issuance, the notes were admitted to the official list and trading on the Global Exchange Market. On April 2, the Kazakhstan Stock Exchange approved the admission of the notes to the rated debt securities category of the official list of the KASE, and the notes were subsequently listed on April 4.

Following KASE listing, Zhaikmunai International will be released from its obligations under the notes, becoming a guarantor of the notes instead, and Zhaikmunai LLP will assume the obligations.

The notes continue to be admitted to the official list and trading on the Global Exchange Market, according to the release.

"This substitution will complete an important step towards increased financial flexibility for Zhaikmunai," chief financial officer Jan-Ru Muller said in the release.

"Thanks to the successful pricing of a $560 million aggregate principal amount of senior bonds with a seven-year maturity (2019) at a fixed coupon of 7 1/8% per annum, Zhaikmunai could prepay $357 million of its existing notes and extend 80% of its existing liabilities to 2019 while reducing its overall borrowing rate.

"This increased financial flexibility bodes well for the pursuit of Zhaikmunai's strategic organic and inorganic growth avenues in the years ahead," Muller added.

Khaikumani LLP's notes due 2015 are not affected by the issuer substitution for the 2019 notes, the release noted.

Zhaikmunai LP is an oil and gas exploration and production company with interests in northwestern Kazakhstan. Its corporate headquarters are in Amsterdam, with a corporate office in Uralsk, Republic of Kazakhstan. Wholly owned subsidiary Zhaikmunai LLP has its corporate offices in Astana, Republic of Kazakhstan.

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