Kazakh bank BTA says not in debt restructuring talks

ALMATY, March 10 (Reuters) - Kazakhstan's largest bank, BTA, said on Tuesday it was not in talks to restructure its debt following market speculation and an appointment of a new financial advisor.

"The bank is not holding any talks on this (debt restructuring) so far," said a bank official who asked not to be named.

The government effectively nationalised BTA last month saying it would have collapsed otherwise. BTA has about $12 billion in foreign debt, of which about $3 billion is due this year.

BTA named Goldman Sachs its financial advisor on Monday but did not say what its role would be.

Kaan Nazli, an analyst with Medley Global Advisors, wrote in a note on Tuesday that the government was keen for banks to resume domestic lending but considered it impossible without changes to the heavy foreign debt repayment schedule.

"As it stands the government is seeking a relatively creditor-friendly solution for BTA bank debt, focusing first on extending maturities for short-term obligations, mostly bilateral and syndicated loans," Nazli said.

He said Alliance ALLBq.L, another bank the government plans to take over, could also restructure some of its debt.

"Bonds held by BTA and Alliance are expected to be restructured in a second phase, possibly in the second quarter of 2009, in which the government plans to offer higher coupon rates in return for extending the maturities," Nazli said.

Alliance could not be reached for comment.

BTA bonds trade at about 20-40 percent of face value, the price that analysts say implies expected restructuring. (Writing by Olzhas Auyezov; Editing by Greg Mahlich)