AT1 Boom Hits Kazakhstan as ForteBank Gets $1 Billion Book (1)

A Kazakh bank created through the merger of several local lenders with a history of defaults is the latest borrower to raise a high-risk form of bank capital.

Investors clamored for the Additional Tier 1 bonds from ForteBank JSC, putting in more than $1 billion of orders Monday for the $400 million offering of perpetual securities. The deal, the first of its kind in Kazakhstan, priced with a yield of 9.875%.

The outcome of the sale shows that some investment managers are willing to turn to more esoteric borrowers from previously unexplored regions of the world to pick ...