Kazakh BTA bank's defaulted bond soars on deal hopes

LONDON, Oct 1 (Reuters) - Kazakh BTA bank's defaulted dollar bond rose more than four points on Monday to six-month highs on speculation that management and creditors are close to thrashing out a restructuring deal.

BTA , majority-owned by Kazakhstan's sovereign wealth fund and the country's third-biggest bank, went into default early this year on a $2.1 billion bond due in 2018, itself a product of a 2010 debt restructuring.

The bond rose as high as 24.5 cents on the dollar on Monday, its highest since late March and up from Friday's 19.5 cents, market sources said. The bond traded as low as 16 cents on the dollar early in September.

A creditor committee formed after the latest default has been negotiating with BTA management but the sovereign fund Samruk-Kazyna has been reluctant to accede to creditors' demands that it guarantee any future debt.

"The way the market is reacting, creditors like what they see. Either the haircut is smaller than expected or the haircut is big but Samruk will guarantee the new bonds," one bondholder said.

Kazakhstan's new prime minister Serik Akhmetov is reported to have met creditors last week in an attempt to get the negotiations moving, the investor said.

A London-based spokesman for BTA said there had been no announcement on the bond on Monday.

(Reporting by Sujata Rao; editing by Robert Woodward)

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