The Republic of Kazakhstan successfully completes second issuance of sovereign panda bonds

Today, September 7 of this year, the Ministry of Finance of the Republic of Kazakhstan successfully completed its second issuance of sovereign Panda bonds on the Chinese stock market, in a total volume of RMB 6.6 billion. The Panda bonds were placed in two tranches: a 3-year tranche at a coupon rate of 1.82% per annum in the amount of RMB 5 billion, and a 5-year tranche at a coupon rate of 1.95% per annum in the amount of RMB 1.6 billion.

Kazakhstan has once again secured financing in the Chinese market on terms comparable to those available to countries with higher "A" category credit ratings. The strong investor interest reflects a positive assessment of the economic and structural reforms being pursued in Kazakhstan, aimed at diversifying and strengthening the resilience of the economy.

The issuance follows the upgrade of Kazakhstan's sovereign credit rating by S&P from "BBB-" to "BBB" with a "Stable" outlook, reflecting sustainable growth prospects and a low level of government debt, which stands at 20.9% of GDP. External government debt stands at 4.5% of GDP, one of the lowest levels in the world.

The placement took place against the backdrop of the further strengthening of the intergovernmental relations between Kazakhstan and China. The consistent policies of the two countries’ leaders contribute to the deepening of their comprehensive strategic partnership, including in trade, investment and finance. The entry of Kazakh issuers into the Chinese market is a practical reflection of this commitment.

The steady expansion of Kazakhstan's presence in international capital markets contributes to broadening funding sources, diversifying the debt portfolio, and building sustainable access to a diverse range of investors. The Ministry of Finance will continue to pursue a balanced approach to sovereign borrowing, taking into account market conditions and the objectives of effective public debt management. This placement of three-year and five-year tranches further contributes to the development of Kazakhstan's sovereign yield curve in Chinese renminbi and establishes a benchmark for future issuances by Kazakhstani quasi-sovereign and corporate issuers.

China International Capital Corporation Limited (CICC) acted as Lead Global Coordinator for the issuance. China Construction Bank Limited (CCB), Industrial and Commercial Bank of China Limited (ICBC), The Export-Import Bank of China, and Bank of China Limited (BOC) served as Joint Lead Managers. Teniz Capital Investment Banking JSC acted as local manager for the transaction.