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Kazakh MBS 2007-I


to the holders of those of the outstanding

US$ 123,000,000 Class A Mortgage Backed Floating Rate Notes due 2029
US$ 11,300,000 Class B Mortgage Backed Floating Rate Notes due 2029
US$ 7,100,000 Class C Mortgage Backed Floating Rate Notes due 2029
(together the
Notes )


Kazakh Mortgage-Backed Securities 2007-I B.V.
Issuer )

NOTICE of removal of indexation - update

BTA IPOTEKA, acting as Originator and Servicer, ( BTAI ) has informed First Kazakh Securitisation Company B.V. (the Loan Notes Issuer) and the Issuer in writing on 14 December 2011 (the Letter) that it has removed the US$ indexation (the Indexation) on the Kazakhstani Tenge denominated mortgages owned by the Loan Notes Issuer (the Mortgage Portfolio).  

In the Letter, BTAI has also requested that the Issuer obtain the consent from the holders of the relevant classes of Notes to approve the removal of the Indexation. We refer to our notice issued on 12 January 2012.

The validity of the removal of the Indexation has been under discussion between the Loan Notes Issuer, the Issuer and BTAI. While no guidance has been received from the National Bank of Kazakhstan, the Loan Notes Issuer and the Issuer, after receiving advice from Kazakh counsel, are of the view that (notwithstanding the transactions constituted by the Issuer issuing the Notes), the Indexation should be removed as a result of a new law adopted by the Republic of Kazakhstan.   The new law   prohibits, inter alia, the indexation of payments made by customers under mortgage loans in Kazakhstan with reference to any currency equivalent.  

Furthermore, various sources indicate that the new law has retroactive effect meaning that customers are not required to pay additional Indexation payments as of 1 March 2011 being the date on which the relevant law came into force in Kazakhstan.   

The Issuer / Loan Notes Issuer has received correspondence from BTAI on 1 February 2012, requesting that:

(a)          customers be reimbursed all additional principal and interest that the securitisation transaction received after 1 March 2011; and

(b)         the principal amount of the relevant mortgages be reduced by an amount equal to the Indexation payment that is no longer payable by a customer owing to the new Kazakhstani law.   BTAI has suggested that the Issuer / Loan Notes Issuer consent to an amendment of the underlying loan agreements to effect this change to a reduction of principal.

During the past month, the Issuer and the Loan Notes Issuer has asked BTAI to seek clarification from the General Prosecutor’s Office of the National Bank of Kazakhstan on a number of issues in relation to the effect of the new law and whether or not the Loan Notes Issuer / Issuer is as a matter of law able to effect amendments to the underlying loan agreements as a consequence of the effect of the new law (or if in fact such an amendment is indeed necessary).   However, BTAI has not received any response and is of the view that it is unlikely to receive conclusive responses in the near future.   

The Issuer will present its analysis on the above issues to the Security Trustee and the relevant Noteholders in due course and convene a meeting as necessary to consider the views of the relevant Noteholders and any action they may direct the Issuer to be take.

The Issuer announces that the information specified above is “regulated information” for the purpose of article 5:25m of the Dutch Financial Supervision Act (Wet op het financieel toezicht).

Amsterdam, 22 March 2012

Kazakh Mortgage-Backed Securities 2007-I B.V.


ATC Management B.V.

Director of the Issuer

Fred. Roeskestraat 123

1076   EE Amsterdam

The Netherlands



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