Komercni banka's board of directors yesterday agreed to call in its USD 200 mil. subordinated debt in May 2003 (maturity in 2008), Reuters reports. The bank has already repurchased approx. 39% of the debt. As the debt carries interest costs of 9% per annum (6M LIBOR +500bps beginning in May 2003), in calling in the debt KB would save interest costs of at least CZK 270 mil. (USD 9 mil.) annually by 2008, we estimate. This would have a positive impact on KB's net interest margin, which is largely expected, though.
Jan Hájek