For the first time since 2015, the Republic of Kazakhstan has successfully returned to the U.S. dollar-denominated eurobond market, issuing a USD 1.5 billion 10-year bond with a coupon rate of 4.714%.
The transaction was preceded by a one-day virtual roadshow, accessible only to countries with high investment ratings. During the day, consultations were held with more than 100 investors from the U.S., the UK, continental Europe, Asia, and the Middle East, which indicated a high level of interest and investor confidence in the Republic of Kazakhstan as a reliable and high-quality issuer on the international capital market.
Moreover, a key factor in the successful placement was the recent upgrade of Kazakhstan’s sovereign rating by Moody’s to Baa1 (stable outlook).
Thanks to the timely placement, the Ministry of Finance managed to achieve optimal parameters in terms of both volume and price. The order book showed steady growth, reaching almost USD 6 billion, which allowed the coupon rate and yield to be set at 4.714%, with a spread over U.S. Treasury bonds of 88 basis points.
This spread is one of the record lows for emerging markets with 10-year sovereign bonds. For comparison, the premium of 88 basis points is lower than the secondary levels of several countries with an “A” rating, such as Saudi Arabia, Chile, and Poland. This reflects the high confidence of international investors in Kazakhstan's economic, financial, and social policies.
This eurobond issuance will strengthen the country's financial stability and support its economic growth. In addition, the favorable placement conditions will create a benchmark for other issuers from Kazakhstan, both quasi-governmental and corporate, to enter international capital markets.
The eurobonds were listed on the London Stock Exchange and the Astana International Financial Centre Exchange.
International organizers, joint lead managers, and bookrunners for the deal were Citi, JPMorgan, Societe Generale, with BCC Invest JSC acting as the local organizer.
