The Government of the Republic of Kazakhstan, represented by the Ministry of Finance, has successfully issued Eurobonds totaling 1,150 mln. euros.
The cost of borrowing on Kazakhstan’s Eurobonds was set at a record low, both for the Republic and the entire CIS region. So, the 7-year Eurobonds set a coupon at 0.6%, which represents a historically low coupon rate ever set by a sovereign from developing countries in the BBB rating category.
Moreover, the yields of both tranches suggest a negative premium to the current curve of the Republic of Kazakhstan in the euro currency and are inside the curves of a number of other developing countries with a higher credit rating, which confirms the presence of high confidence and interest from international investors in Kazakhstan.
The tranche with a 15-year circulation term became the longest issue denominated in euros ever issued by an issuer from the CIS region.
This transaction allowed the Republic of Kazakhstan to diversify its investor base by attracting investors traditionally focused on the euro. By issuing a 15-year tranche, Kazakhstan has been able to lengthen the yield curve in euros and strengthen its credibility in international capital markets.
The issue was preceded by a 2-day road show in London by a delegation consisting of representatives of the ministries of finance, the national economy, the National Bank and the Astana International Financial Center.
On September 25, pricing took place, according to the results of which the order book amounted to about 2.8 billion euros with the participation of more than 110 high-quality investors.
Eurobonds were placed on the London Stock Exchange and the Astana International Financial Center Exchange.
At the same time, both tranches with total amount of 192 mln. euros were placed on the Astana International Financial Center Exchange, which is 17% of the total amount of Eurobonds placed.
As the international organizers, joint lead managers and bookrunners of the transaction were Citi and Societe Generale, as a joint lead manager – UBS and as a Kazakhstan organizer – First Heartland Securities JSC (FHS).
Source: Ministry of Finance of the Republic of Kazakhstan