NUR-SULTAN
Kazakhstan’s National Welfare Fund Samruk-Kazyna has issued five-year Eurobonds in the amount of $500 million with a coupon of 2 percent per annum.
Samruk-Kazyna, a national strategic holding company, was established in 2008. The Fund’s sole shareholder is Kazakhstan’s government. The Fund is tasked with facilitating the development of the national economy via management of a portfolio of companies, including those of most strategic importance. The entity holds stakes in more than 60 companies across various sectors in Kazakhstan, including natural resources, railway, transport, energy, infrastructure and postal service.
Proceeds from the issue will primarily be used for general corporate purposes, which may include refinancing existing indebtedness and funding its portfolio companies’ ordinary course of business.
The Fund said that the priority in the sale of securities was given to Kazakh investors who purchased shares through the Kazakhstan Stock Exchange and Astana Financial Center.
The issue is also expected to take place on the London Stock Exchange, the Fund said in a statement. It did not provide any other details about the upcoming issue.
The final order book included many of the world’s leading investors, including funds and asset managers from the United States, Europe and the UK. More than 70 international investors took part in the placement.
The total demand for bonds exceeded the initial supply by almost three times, making it possible to reduce the final range for the deal to 2.3 percent +/- 5 basis points. The placement was closed with a profitability of 2.25 percent.
The deal was arranged by international banks Citi, MUFG, UBS and VTB Capital, acting as joint lead managers and bookrunners, together with Kazakh managers of First Heartland Securities JSC and Freedom Finance JSC.
Earlier this month, Fitch Ratings assigned Sovereign Wealth Fund Samruk-Kazyna U.S. dollar-denominated Eurobonds an expected ‘BBB(EXP)’ rating.
Fitch classified Samruk-Kazyna as an entity ultimately linked to Kazakhstan under its Government-Related Entities (GRE) rating criteria and applied a top-down approach based on its assessment of the strength of linkage with and incentive to support by the state.
The GRE support score is assessed at 45 out of a maximum 60, reflecting a combination of a ‘Very Strong’ assessment for status, ownership and control and financial implications of default, and ‘Strong’ assessment for support track record and socio-political implications of default.
S&P rated Samruk-Kazyna’s Eurobonds at ‘BBB-‘.