Kazakhstan raises $2.5 bln with int'l bond offering, twice over-subscribed - Finance Ministry

ASTANA. June 25 (Interfax) - Kazakhstan's Finance Ministry placed $2.5 billion of international bonds on June 24, the ministry said in statement.

The dual-tranche offering included $1.35 billion in 7-year notes at a 5% coupon and $1.15 billion in 12-year bonds priced at 5.5%.

"The 2-to-1 oversubscription demonstrates strong confidence from global investors," the ministry said, noting participation from institutional buyers across Europe, North America, Asia, and the Middle East following a London roadshow with 180 investors.

Kazakhstan secured borrowing costs competitive with higher-rated nations, achieving yields below those of BBB-rated peers, while matching pricing for some A-rated sovereigns. The deal set a 2024 benchmark for the lowest yields among similarly rated emerging market issuers.

"Despite challenging market conditions, we achieved competitive pricing comparable to higher-rated A/AA sovereigns like Poland, Saudi Arabia and Chile," the ministry stated, noting yields came in significantly below BBB-rated peers, including Mexico, Hungary and Peru.

Kazakhstan set a record by issuing bonds at one of the lowest coupon levels among A/BBB-rated sovereigns in 2025.

The bonds will be listed on the LSE, AIX Exchange and KASE. "Proceeds from the issuance will cover 100% of the country's outstanding Eurobond obligations due for repayment," the ministry said.

The Astana International Exchange (AIX) said on June 24 that Kazakhstan's sovereign bond offering would comprise two tranches - a 7-year bond targeting 5.25% yield and a 12-year note at approximately 5.625%, with minimum sizes of $500 million per tranche.

Kazakhstan placed $1.5 billion in 10-year 4.714% bonds in October 2024, the last time it tapped the international bond market. The premium or spread between these and U.S. Treasuries was 88 basis points, which the Kazakh Finance Ministry said was a "record for emerging countries." The issue was four times oversubscribed.

The government projects a 2025 budget deficit of 2.7% of GDP.