Samruk-Kazyna, Kazakhstan's sovereign wealth fund, has published a memorandum for a medium-term bond programme worth a total of $1.5 billion. The fund plans to raise the borrowing across several trading venues at once — the London Stock Exchange (LSE), the Hong Kong Stock Exchange (HKEX), and Kazakhstan's KASE and AIX, according to infohub.kz.
No exact issue date has been set yet. The bonds are expected to be issued in series, each of which may include one or more tranches. The programme's stated limit is $1.5 billion, though it may be increased later.
Yields and maturities will be agreed separately for each tranche. The rate may be fixed, floating or zero. The minimum denomination will be 100 euros, or $200 for US investors. The issues may be arranged by international banks Citigroup Global Markets Limited, Guotai Junan Securities (Hong Kong) Limited and Standard Chartered Bank.
When placing bonds abroad, the issuer is required to offer at least 30% of each issue through the Kazakh exchanges KASE or AIX. A rule taking effect on 21 October, meanwhile, exempts companies from placing bonds in Kazakhstan if the overseas placement is on more favourable terms for the issuer or if there is no demand on KASE and AIX.
The issues themselves have not yet been finalised. Samruk-Kazyna has applied to the London and Hong Kong exchanges for admission to trading under the programme within 12 months.
The stated uses of the borrowing are financing and lending to portfolio companies, carrying out strategic projects and refinancing debt. The fund uses borrowed funds to provide intragroup loans and to finance the day-to-day operations and investment programmes of its subsidiaries and affiliates in oil and gas, transport, energy, mining and telecommunications.
It was reported earlier that the Development Bank of Kazakhstan had signed a preliminary agreement for a loan of up to 2 billion yuan (about $300 million). The funds will go towards lending for projects in priority sectors of Kazakhstan's economy.