The Republic of Kazakhstan has successfully returned to the eurobond market denominated in US dollars for the first time since 2015, placing a 1.5 billion USD issue for 10 years with a coupon rate of 4.714%.
The transaction was executed following a one-day virtual roadshow, accessible only to countries with high investment ratings. During the day, over 100 investors from the US, the UK, continental Europe, Asia, and the Middle East were consulted. This reflects strong investor interest and confidence in Kazakhstan as a reliable and high-grade issuer in the international capital market.
An important factor in the successful placement was Moody’s upgrade of Kazakhstan’s sovereign rating to Baa1 (with a stable outlook). The timing of the placement allowed the Ministry of Finance to achieve optimal parameters in terms of both volume and price. The order book showed steady growth, reaching 6 billion USD, enabling the coupon rate and yield to be set at 4.714% and the spread over US Treasury bonds at 88 basis points.
This spread is one of the record lows for 10-year sovereign bonds of emerging countries. By comparison, the 88 basis point premium is lower than the second-tier levels of some “A” rated countries like Saudi Arabia, Chile, and Poland. This demonstrates the high level of international investor confidence in Kazakhstan’s economic, financial, and social policies.
This eurobond issuance will help strengthen the country’s financial stability and support its economic growth. The favorable terms of the placement set a benchmark for quasi-government and corporate issuers from Kazakhstan seeking to enter the international capital markets.
The eurobonds were listed on the London Stock Exchange and the Astana International Financial Centre Exchange. Citi, JPMorgan, Societe Generale acted as global organizers, joint lead managers, and bookrunners, with “BCC Invest” JSC serving as the Kazakh organizer.
