The press release on a $750 million deal from Kazakhstan's Bank TuranAlem trumpeted the issuer's approach to "an entirely new investor base", but a few sources close to the deal said it was placed privately, and at least one acknowledged that that meant the arrangers swallowed the trade.

At any rate, even if joint bookrunners and lead arrangers ABN AMRO and Standard Chartered, and joint lead arranger JPMorgan, turned out to be "an entirely new investor base" for Bank TuranAlem, the transaction is the first to close in the cross-border EM in two jittery months.

The arrangers involved declined to comment.

Ultimately, the deal proved to be a reminder of just how grim conditions have gotten for certain kinds of originators. Apart from an undisclosed investor public, pricing was undisclosed, and three of four tranches were wrapped by monoline insurers.

The deal, backed by diversified payment rights (DPRs) had Ambac, FGIC, and MBIA each wrapping $200 million, while a $150 million tranche went unwrapped. All tranches had an average life of 5.6 years, and the unwrapped rating was rated "Baa3" and "BBB-" by Moody's Investors Service and Standard & Poors, respectively.

While BTA's DPR business depends more than anything on trade - and the price of oil, a chief export, remains sky high - the bank belongs to a sector that has received notice lately due to its sharp dependency on overseas borrowing. All three rating agencies have addressed the issue in the past couple of months in light of the retreat of global liquidity, and unless market investors return, the picture could be significantly bleaker by early next year, sources said.

According to a presentation compiled by Fitch Ratings, foreign borrowings accounted for 48% of funding for Kazakh banks at the end of the first half of the year. The agency said it viewed banks' dependence on foreign funding as "very high and a source of significant structural risk."

Fitch characterized the near-term risk as "moderate" and pointed out that 75% of the leading banks' large-ticket funding matures in 2009 and beyond, market sources are talking about what kind of funding terms the six major Kazakh banks can secure with roughly $3.5 billion in foreign debt coming due between the end of August and the end of the year.

Recognizing the risks, last week S&P dunked the sovereign's foreign currency ratings by a notch to "BBB-." Banks' difficulties finding short-term cash were cited as one of the pressures.

What's more, last week, the chairman of the National Bank of Kazakhstan, Anvar Saidenov, dismissed talk that the Bank might step in to shore up commercial banks if they start to look shaky. Dow Jones Newswires cited the executive pledging not to use foreign exchange reserves to bail out commercial banks. At any rate, those reserves have plunged more than 20% since troubles in U.S. sub-prime mortgages began to dry up global liquidity.

Still, there are grounds for hope. One is that liquidity could loosen up sooner rather than later. Another is that arrangers pique the interest of the emerging market investors that haven't been fleeing the market, and may not have the reticence displayed lately by ABS investors. A third is that energy is still pricey, and Kazakhstan is teeming with deposits, which has made it one of the fastest growing economies in the last several years. While the IMF, for instance, recently reduced its forecast for Kazakhstan's GDP growth this year, it was still, at 7.5%, a rate that would make most governments euphoric.

The economy has tripled in size since 2001.

(c) 2007 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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