There has been significant client interest and mixed analyst opinions in the market about how to read the recently announced consent solicitation suggested by Kazakh Gold. Reading 1, positive, suggested that the powerful Russian Polyus Gold Group remains guarantor for the bond therefore making it attractive as it would be a high-quality Russian credit. Reading 2, negative, suggested that the guarantor is changing into Kazakh Altyn Group (Assaubaev family) should bondholders grant consent, and therefore would be a private high-risk Kazakh credit, which should be trading at some double-digit yield. It looks like there have been more investors for Reading 1 judging by the price dynamics of the bond which recently jumped to over 105% of par from below par quotes before the announcement. We have spoken to the company’s Investor Relations department to clarify the matter.
Commerzbank Corporates & Markets
Emerging Markets