Article 1. Basic concepts used in this Law Chapter 1. GENERAL PROVISIONS of the Law on Project Financing and Securitization

Home / RLA / Article 1. Basic concepts used in this Law Chapter 1. GENERAL PROVISIONS of the Law on Project Financing and Securitization

 The following basic concepts are used in this Law:

1) a special financial company is a legal entity established in accordance with this Law to carry out project financing and securitization transactions in favor of which the rights of claim are assigned;

2) own funds of a special financial company – assets, liabilities, equity and income (expenses) received (incurred) upon completion of project financing and securitization transactions. The special financial company's own funds do not include the allocated assets, bonds (including the accrued coupon on them) of the special financial company;

3) bonds of a special financial company – bonds for which the fulfillment of the issuer's obligations is secured by allocated assets;

4) basic agreement – a written agreement under which one party undertakes to create and (or) transfer property to the other party or provide services and (or) produce goods and (or) perform work in the process of using the created property;

4-1) agent bank - a second–tier bank, the Development Bank of Kazakhstan, a branch of a non–resident bank of the Republic of Kazakhstan;

5) allocated assets – the rights of claim assigned to a special financial company in project financing and securitization transactions, money in accounts with a custodian bank received under the rights of claim assigned to it, financial instruments acquired by a special financial company as a result of investing the specified money, money received as a result of the sale of financial instruments, as well as property and property rights arising from the creation of additional collateral;

6) debtor – a person who has an existing or future monetary obligation;

7) project financing is a method of organizing the financing of a long–term project for the assignment of rights of claim, which is secured by expected systematic monetary payments for the creation and (or) transfer of property, and (or) the provision of services and (or) the production of goods and (or) the performance of work in the process of using the created property;

8) project financing transaction – actions of the customer, contractor, special financial company, creditors and other persons aimed at establishing their rights and obligations within the framework of the execution of the basic agreement, as well as the acceptance and fulfillment of obligations secured by allocated assets;

9) investment portfolio manager is a professional participant in the securities market who provides services to a special financial company for investing temporarily available proceeds on allocated assets based on a license to manage an investment portfolio;

9-1) the pledge manager is a legal entity acting on behalf of and in the interests of the co–holders by virtue of a pledge management agreement concluded between them, concluding a pledge agreement on behalf of the co-holders;

10) lender – an individual and (or) a legal entity holding bonds, or a legal entity providing loans for project financing, or a person providing loans for syndicated financing;

10-1) members of the creditors' syndicate are second–tier banks, the Development Bank of Kazakhstan, branches of non–resident banks of the Republic of Kazakhstan, banks of the Astana International Financial Center, non–resident banks of the Republic of Kazakhstan, international financial organizations;

10-2) borrower – a legal entity to which a loan is provided in the framework of syndicated financing;

11) additional collateral – ways to ensure the fulfillment of obligations of a special financial company to creditors in the form of guarantees, sureties, collateral, as well as in other ways stipulated by contracts;

12) originator – a legal entity that performs assignment of rights of claim when concluding a securitization transaction;

13) contractor – a legal entity that, in accordance with the basic agreement, creates and (or) transfers property, and (or) provides services and (or) produces goods and (or) performs work in the process of using the created property;

14) securitization – financing against the assignment of a monetary claim by issuing bonds secured by allocated assets;

15) securitization transaction – acquisition by a special financial company of claim rights and issue of bonds secured by allocated assets;

15-1) syndicated financing is a method of financing a borrower by several creditors on the basis of a single syndicated loan agreement;

15-2) syndicated loan organizer – a person who, in accordance with the agreement on the organization of syndicated financing, performs the functions of forming the membership of the syndicate of creditors and organizing the process of concluding a syndicated loan agreement with the borrower and is not a participant in the syndicated loan;

16) rights of claim – monetary claims existing at the time of conclusion of the contract of assignment of rights of claim (existing rights of claim), as well as monetary claims that will arise in the future from an existing obligation or from a future obligation (future rights of claim);

17) receipts for claims – receipts in cash for debtors' obligations, as well as receipts from persons using property created under the basic agreement or purchasing goods, works, and services in the process of using the created property;

18) uniformity of claim rights – compliance of claim rights with a common objective criterion determined by the bond issue prospectus or private memorandum, or the bond program prospectus, or the bond issue prospectus or private memorandum within the bond program;

19) the customer is a natural or legal person, a state represented by the Government or a local executive body, as well as state bodies authorized by them, on whose instructions the basic agreement is being implemented.;

20) authorized body - a state body that carries out state regulation, control and supervision of the financial market and financial organizations;

21) affiliated persons – individuals or legal entities (with the exception of state bodies exercising control and supervisory functions within the scope of their powers) that have the ability to directly and (or) indirectly determine decisions and (or) influence decisions made by each other (one of the persons), including by virtue of a concluded transaction.

22) a foreign professional organization is an international organization, a foreign legal entity, or a foreign organization that is not a legal entity that establishes uniform rules and (or) standards in financial markets included in the list approved by the authorized body.

The Law of the Republic of Kazakhstan dated February 20, 2006 No. 126.

This Law establishes the legal basis and conditions for project financing and securitization in the Republic of Kazakhstan, defines the specifics of the assignment of claims and the legal regime of property in project financing and securitization, the legal status of a special financial company, as well as the legal basis and conditions for syndicated financing.

President

Republic of Kazakhstan

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