December 15, 2017
Halyk Finance successfully leads issuance and placement of debut Tenge-denominated KZT 100 bn 3-year Eurobond by JSC “Development Bank of Kazakhstan”
JSC Halyk Finance has successfully acted as a Joint Bookrunner in the debut Tenge-denominated KZT 100 bn 3-year Eurobond by JSC “Development Bank of Kazakhstan” (“DBK”).
On December 7th, DBK had opened a global investor book for its debut Tenge-denominated 3-year Eurobond with an expected nominal issue amount of KZT 100 bn. Orders from investors in Kazakhstan were collected through the Kazakhstan Stock Exchange (the “KASE”) concurrently with the international bookbuilding process. The initial price guidance was set at a yield-to-maturity in the range of 9.625%-9.875% p.a. Upon the books’ closing, a very robust investor demand in the amount of c. KZT 170 bn (c. $510 MM) had allowed DBK to set the final annual yield-to-maturity at the lowest end of the announced range i.e. at just 9.625% p.a. The coupon rate was set at 9.50% p.a. and the total issue amount was confirmed at KZT 100 bn (c. $300 MM).
The securities’ settlement has been made on December 14th. The Eurobond was issued under DBK’s $2 bn Medium Term Note Programme, in which Halyk Finance acts as a Joint Arranger and Dealer.
This groundbreaking transaction has marked the first-ever public Eurotenge bond offering to a wide range of international and domestic investors by a Kazakhstani issuer. The orderbook for the deal was subscribed by a group of high-quality institutional investors from the UK, US Offshore, Continental Europe and Kazakhstan, and had reached a substantial demand even despite aggressive levels of the initial price guidance. The final yield-to-maturity at 9.625% represents a c. 70 bps spread over Kazakhstan’s sovereign domestic yield curve and is one of the lowest premiums achieved among all CIS quasi-sovereign peers of DBK to their respective sovereign yield curves across all currencies – hard and soft. The final DBK pricing also marks the lowest yield-to-maturity among all primary placements of KZT-denominated domestic bonds on the KASE made by Kazakhstan’s quasi-sovereign companies in 2017.
Mr. Arnat Abzhanov, Halyk Finance’s CEO, says “DBK has traditionally been an ice-breaker by executing truly innovative transactions in the international and domestic capital markets, and its deals often become breakthrough debuts not only for DBK and Kazakhstan, but also for the whole CIS region. This Eurotenge issue’s success evidences both global investors’ healthy appetite towards DBK’s credit risk and growing interest from the international investor community to Tenge instruments. I am positive that this Eurotenge fundraising – which fully encompasses international investor demand – will be of strong interest to many Kazakhstani issuers.”
Earlier in December 2012, Halyk Finance had successfully acted as a Joint Dealer Manager in DBK’s intermediated exchange offer for the bank’s Eurobond due December 2015, which became the 1st transaction ever done globally for USD-denominated bonds, engraving a prominent liability management benchmark for all issuers out of Kazakhstan. In addition, in August 2012, Halyk Finance had fruitfully acted as a Joint Lead Manager on DBK’s debut MYR 240 MM 5-year Sukuk al-Murabahah issue with a profit rate of 5.50% which marked the 1st-ever Sukuk issue out of the CIS region with DBK becoming the 1st-ever issuer from the CIS/CEE region to tap the Malaysian market.
JSC Development Bank of Kazakhstan is a development institution of the Republic of Kazakhstan with the mission to promote the sustainable development of the national economy by investments into the non-resource sector of the country. JSC Development Bank of Kazakhstan is 100% owned by JSC National Managing Holding “Baiterek”.
JSC Halyk Finance is the leading investment bank in Kazakhstan rendering a full range of investment banking services including consulting and underwriting, corporate finance (M&A advisory and corporate debt restructurings), brokerage sales and trading with market making on the KASE, investment portfolio management and research.
JSC Halyk Bank of Kazakhstan is one of Kazakhstan's leading financial services groups and a leading retail bank with the largest customer base and distribution network among banks in Kazakhstan. The Bank is developing as a universal financial group offering a broad range of services (banking, insurance, leasing, brokerage and asset management) to its retail, small and medium enterprises and corporate customers. Halyk Bank also operates in Russia, Georgia and Kyrgyzstan.
JSC Halyk Bank
tel. +7 727 2 590 891
Mr. Farkhad Okhonov
Consulting & Underwriting
JSC Halyk Finance
Тел.: +7 727 357 31 77