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MIGA Insures Mortgage-Backed Securitization in Kazakhstan

WASHINGTON, DC, April 2, 2007—The Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group, announced today that it has issued $10.2 million in guarantee coverage to the First Kazakh Securitization Company, B.V., for a securitization of residential mortgage loans in Kazakhstan. MIGA is providing political risk coverage for a portion of interest payments on the mortgage portfolio in the event of government-imposed transfer and convertibility restrictions, as well as for expropriation.  

The transaction, valued at $141.4 million, is Kazakhstan’s first long-term capital markets issue for a true-sale securitization of mortgages. First Kazakh Securitization Company B.V. will use the proceeds of the issue to refinance the original warehousing arrangements put in place in February 2006 to fund the purchase of receivables arising from Kazakhstani mortgage loans originated by BTA Ipoteka, the consumer lending subsidiary of Bank Turan Alem. The loans are secured on properties located in the Republic  of Kazakhstan.   MIGA insured the first stage of this securitization in 2006. 

“Kazakhstan faces a housing shortage with demand for housing significantly outpacing supply,” says Ileana Boza, head of MIGA’s financial services team. The residential mortgage market has tripled in size every year since 2002 and is expected to continue this rapid growth, according to the Fitch pre-sale report. “With the support of MIGA, the parties to the transaction were able to complete an elaborate structured finance deal that gives an eager market access to new forms of finance,” Boza adds.

MIGA’s coverage was instrumental in notching up the transaction’s rating by Fitch to A-, allowing it to pierce the country ceiling of BBB+. MIGA will provide coverage for six months of scheduled interest payments on the mortgage portfolio.  

Jorge Rivas, a senior underwriter in MIGA, notes: “The MIGA guarantee will help further Kazakhstan’s efforts to support the growth of financial instruments for leasing, mortgages and other assets.”

This is MIGA’s fourth capital markets transaction, indicating the growing interest across the financial sector in using political risk insurance to facilitate developing country access to international financial markets.

For information:
Angie Gentile,, 202.473.3509
Rebecca Post,, 202.473.1964


Release no. 2007/110
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