Question: Has a Failure to Pay Credit Event occurred with respect to JSC Alliance Bank?
In particular, is the obligation of the Reference Entity to deposit the converted amount of Recoveries into the Collection Account pursuant to Condition 6(a) of the Recovery Notes a "payment" and, if so, is such payment "under" the Recovery Notes, in each case for the purposes of Section 4.5 (Failure to Pay) of the 2003 ISDA Credit Derivatives Definitions?
Additional Information:
Has a Failure to Pay Credit Event occurred with respect to JSC Alliance Bank (the "Reference Entity")? In particular, is the obligation of the Reference Entity to deposit the converted amount of Recoveries into the Collection Account pursuant to Condition 6(a) of the Recovery Notes a "payment" and, if so, is such payment "under" the Recovery Notes, in each case for the purposes of Section 4.5 (Failure to Pay) of the 2003 ISDA Credit Derivatives Definitions?
For the purposes of this letter, capitalised terms have the meaning given in the Conditions. "Conditions" means the terms and conditions of the Recovery Notes (as defined in and constituted by a Trust Deed dated 25 March 2010 by and between JSC Alliance Bank and BNY Corporate Trustee Services Limited (the "Trust Deed")). On or around 26 December 2013, the Reference Entity failed to deposit into the Collection Account an amount equal to the USD equivalent of Recoveries. Such obligation arose when Recoveries exceeding the equivalent of USD1,000,000 had been received by the Reference Entity, in which case it was required to make payment of the USD equivalent of all such Recoveries into the Collection Account (as defined in the Trust Deed). The obligation to deposit the USD equivalent of such Recoveries into the Collection Account arises under, and is contained in, Condition 6(a). Subject to the Conditions, the Collections standing to the credit of the Collection Account are used to make Recovery Notes Payments pursuant to Condition 7(b). The failure to make the deposit exceeds the Payment Requirement.
Publicly Available Information
In slide 21 of its Investor Presentation dated 23 January 2014, the Reference Entity states, amongst other things, that: (a) it had stopped making payments into the Collection Account; (b) a breach of Condition 6(a) of the Recovery Notes had occurred; and (c) an Event of Default had occurred and was continuing under Condition 14(iii) of the Recovery Notes. The Investor Presentation has been published on the Reference Entity's website http://www.alb.kz/up_files/2014alliancbanknvestorpresentation.pdf. A breach of Condition 6(a), and an Event of Default under Condition 14(iii), as referred to in slide 21, would only arise if the cessation of payments into the Collection Account were for an amount exceeding the equivalent in any currency or currencies of USD1,000,000.
slide 21 of Investor Presentation dated 23 January 2014
Attachments:
slide 21 of Investor Presentation dated 23 January 2014 - http://www.alb.kz/up_files/2014alliancbanknvestorpresentation.pdf