UPDATE 1-Kazakh Alliance Bank agrees debt restructuring

* Agrees with creditors on debt restructuring terms

* Offers limited debt buyback with 77.5 pct discount

(Adds detail, central bank comment, background)

ALMATY, July 8 (Reuters) - Kazakhstan's fourth-largest bank Alliance (ALLBq.L) said on Wednesday it had reached an agreement with creditors on restructuring its $4 billion debt, putting an end to months of uncertainty over its future.

Alliance halted debt repayments in April and has said it would have to write down $2-3 billion due to bad loans and previously undisclosed asset pledges. It has also said a failure to restructure debt would lead to its bankruptcy.

The bank said in a statement that its creditors had five options as part of the deal, the most straightforward of which is a debt buyback at a 77.5 percent discount, limited to $500 million.

Alliance said it would buy back debt with face value of at least $1.85 billion this way.

Three other options include extending the maturity of some debt by seven to 13 years at reduced interest rates, with or without a discount. The final option is to convert debt into preferred shares with a 75-80 percent discount.

Alliance said the state welfare fund Samruk-Kazyna would buy a controlling stake in the bank after restructuring and provide it with fresh capital.

Alliance said it would submit the restructuring plan to Kazakhstan's banking regulator on July 15.

Two other Kazakh lenders, including No.1 bank BTA BTAS.KZ, are also in talks to restructure their debt.

Kazakh central bank chairman Grigory Marchenko told reporters separately on Wednesday that BTA, which owes creditors about $15 billion, is due to complete talks by August.

"Work is continuing with regard to BTA," Marchenko said.

Commenting on a BTA announcement this month that Goldman Sachs (GS.N) would no longer advise it on restructuring, Marchenko said: "I think this will have no impact on the entire process."

Kazakh banks had been borrowing and expanding aggressively before the global crisis and now face asset quality problems as their customers are unable to meet repayments. (Writing by Maria Golovnina and Olzhas Auyezov, editing by Will Waterman)