Kyrgyzstan to use proceeds from debut bond offering with listing in Russia for development projects

BISHKEK. Dec 19 (Interfax) - Kyrgyzstan plans to use proceeds from an offering of debut bonds in the Russian and Kyrgyz currencies with a dual listing for development projects, Kyrgyz Finance Minister Almaz Baketaev said at a press conference on Tuesday.

"Investors from Russia are interested and willing to buy our securities. The proceeds will be used for development, for projects in which large multiple effects are expected. Not a single som will be disinvested or used to pay salaries or pensions, only for development," Baketaev said.

Kyrgyzstan is offering two bond issues, one worth 1 billion rubles with face value 100 rubles each, and the other 1 billion som with face value of 100 som each. They will be listed on the Moscow Exchange and Kyrgyz Stock Exchange, Deputy Kyrgyz Finance Minister Umutzhan Amanbaev said during an online presentation of the bonds on Tuesday.

The two-year bonds will be placed at their face value. The ruble bonds will yield 14.5% and the som bonds 15.5%. The coupons will be paid quarterly.

The bid book will close in Russia at 2:00 p.m. local time on December 20 and in Kyrgyzstan on December 21. An auction for primary placement on the Kyrgyz exchange will take place on December 22. The ruble issue should start trading on December 26 and the som issue on December 25.

The placement organizers in Russia are Gazprombank, Russian Agricultural Bank, BCS CIB and Derzhava Bank . The settlement agent in Russia is Gazprombank.

The bonds are being issued under Kyrgyz law, Alexei Rudenko, executive vice president and head of debt market instruments at Gazprombank, said at the presentation.

"Kyrgyzstan's bonds have already been admitted to trade on the Moscow Exchange in both rubles and som. Their primary placement and subsequent secondary trading will proceed in the same way as any other bonds traded on the Moscow Exchange. We are working to ensure target the biggest pool of investors for these issues," Rudenko said.

The ruble bonds could set a precedent for placing government bonds in different currencies to diversify sources of financing and broaden the range of investors, the Kyrgyz finance minister said earlier.

Kyrgyzstan's Finance Ministry began placing government securities on the Kyrgyz Stock Exchange for the first time in May 2023. The country's government bond market has been local in nature until now.