The coupon rate was set at 16.92% for the first coupon period.
Yesterday, Kazakhstan Temir Zholy successfully placed a debut issue of tenge denominated coupon bonds with volume of T50bn ($150m) and 10 years tenor on the Kazakhstan Stock Exchange. The coupon rate was set at 16.92% for the first coupon period. Inflation indexed coupon with 2.52pp fixed margin is to be paid once in a year. The maximal and minimal possible rates are 7.52% and 18.52%, correspondingly. The program's volume is T200bn ($599m).
KTZh currently has 4 bond issuances with aggregate principal of 815 billion tenge (at the current USD / KZT and CHF / KZT exchange rate): USD 6,950% KTZ '42, CHF KTZH2,590% '19, CHF KTZ 3,638% '22, USD KTZ 6,375% '20, USD KTZ 7.0% '16. The company plans to use the proceeds from the bond issue to refinance its Eurobonds with the closest repayment scheduled for 11 May 2016. We positively assess the company's incentive to decrease its FX leverage in light of the expected tenge volatility.
Disclosure: Halyk Finance has acted as the sole financial advisor and bookrunner for the transaction.