ASTANA – Kazakhstan successfully placed $2.5 billion in sovereign U.S. dollar Eurobonds on June 24, attracting strong interest from foreign investors, the Finance Ministry announced.
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The issuance included two tranches: a 7-year bond worth $1.35 billion with a 5% coupon rate, and a 12-year bond worth $1.15 billion with a 5.5% coupon rate.
The placement followed a physical roadshow in London, where the Kazakh Finance Ministry’s team met with around 180 key investors. The offering drew demand worth twice the issuance size, demonstrating strong interest from quality and diversified investors from Europe, the United States, Asia, and the Middle East.
In simple terms, Kazakhstan borrowed money from foreign investors by issuing debt securities – Eurobonds. These securities will be repaid with interest over seven and 12 years. The high demand for this offering reflects international trust in the Kazakh economy.
Despite the challenging market conditions resulting from a sharp decline in oil prices, geopolitical instability, and base rate volatility, the ministry achieved competitive placement conditions. Yield levels were comparable to those of higher-rated (A/AA) countries, such as Poland, Saudi Arabia, and Chile, and significantly lower than those associated with nations rated BBB, including Mexico, Hungary, and Peru.
In addition, Kazakhstan set a record by issuing bonds at one of the lowest rates among A/BBB-rated countries this year. These yield levels have been achieved thanks to the country’s strong macroeconomic fundamentals, including ongoing robust economic growth, low levels of government debt, and strong external reserves.
The fiscal and tax reforms, alongside political changes initiated by President Kassym-Jomart Tokayev, have also significantly increased the confidence of international investors.
The placement of Eurobonds also made it possible to establish a benchmark for future issues of quasi-government and corporate issuers.
The Eurobonds will be listed on the London Stock Exchange, the Astana International Exchange, and the Kazakhstan Stock Exchange. The ministry successfully refinanced the previously issued Eurobonds subject to full redemption.
