Kazakh retailer defaults on domestic bond

ALMATY, March 12 (Reuters) - Kazakh food and beverages retailer Kazakh Distribution Company (KDC) KZDK.KZ will default on a coupon payment on its domestic bond due early next week, but has promised to pay the amount by March 31, the stock exchange said.

The Kazakh Stock Exchange said on Thursday that KDC becomes the eighth domestic issuer to default on its bond.

In a statement quoted by the stock exchange, KDC told its creditors it would not be able to pay a semiannual coupon on its 1 billion tenge ($6.6 million) bond by the due date of March 16 and promised to pay up by the end of this month.

“The payment... will be made by March 31 due to the current crisis,” it said.

The Central Asian state’s $11 billion bond market has suffered from the global financial crisis which has brought Kazakhstan’s oil-driven economy to the brink of recession.

Seven small Kazakh companies -- including an alcohol beverages producer, a construction company and an oil-to-chemicals firms -- had earlier defaulted on their domestic bonds, but one of them has since repaid the debt.

Local pension funds, investment funds and insurers are the key investors on the market. (Writing by Olzhas Auyezovl; Editing by Anshuman Daga)