Investors Show Record Interest in Kazakhstan's Eurobonds

On October 4, the Ministry of Finance of the Republic of Kazakhstan reported on how potential investors reacted to the country's first placement of dollar bonds on the stock market since 2015.

The day before, the Ministry of Finance announced the issue of one and a half billion dollars of Eurobonds.

According to the Ministry of Finance, Kazakhstan issued dollar bonds for 10 years with a coupon rate of 4.714%. Kazakhstan's Eurobonds were placed on the AIFC Stock Exchange (AIX) and the London Stock Exchange.

More than a hundred investors from the USA, Great Britain, Europe, Asia, and the Middle East were previously presented with the country's economic potential. The Ministry stated that the timely placement of the bonds enabled optimal parameters for the volume and price of the securities issuance. Investors demonstrated significant interest in the first placement of Kazakhstan's Eurobonds in nine years.

The total order book demonstrated steady growth, reaching almost six billion dollars, which allowed us to set the coupon rate and yield at 4.714%, with a premium (spread) to US Treasury bonds of 88 basis points. This spread is one of the record-breaking for developing countries with sovereign bonds for a period of 10 years,
  the Finance Ministry emphasized.

The Ministry expects the Eurobonds to strengthen the country's financial stability, support its economic growth, and open Kazakhstani companies to international capital markets.

Kazakhstan's return to the dollar bond market was long prevented by a protracted litigation with Moldovan businessmen Anatolie and Gabriel Stati, which resulted in the country's assets worth $28 billion being frozen.

In July 2024, the "Stati case" ended with a settlement agreement.

Original Author: Nikita Drobny