Eurasian Development Bank Issued Bonds for Fifteen Billion Tenge

On 28 April 2009, the Eurasian Development Bank issued its debut international bonds for a total of 15 billion tenge or about $100 million. This issuance was done in the frame of the EDB’s current EMTN Programme which was registered in London in the end of the last year for a total of $3.5 billion. The issuance was assigned the ‘ВВВ’ and ‘ВВВ’ ratings by Standard & Poor’s and Fitch Ratings, respectively. Earlier, Moody’s Investor Services assigned the ‘A3’ rating to the EMTN Programme itself.

The bonds will be placed among Kazakhstan investors, first of all pension funds and insurance companies, and listed on the special trading platform of the Regional Financial Centre of Almaty. The maturity period of the bonds is five years. The coupon rate will be fixed at 15% in the first year, and starting from the second year it will be linked to the consumer prices index in Kazakhstan plus 1.00% per annum. The coupon rate will be limited to the range of 8-16% per annum throughout the maturity period.

This is the first issuance of bonds in tenge by an international development bank in Kazakhstan. Dmitry Krasilnikov, member of the EDB Executive Board, commented that “the tenge proceeds from the sale of bonds will be fully invested in infrastructure projects in the Kazakhstan economy. In so doing, depending on the market situation and an increase in its investment portfolio, the EDB looks forward to becoming a permanent issuer in Republic of Kazakhstan where national pension funds have accumulated considerable reserves but have insufficient room for diversifying their investments in quality issuers”. The credit and ratings indicators of the EDB meet the requirements of the most conservative investors in Kazakhstan, first of all, the national pension funds.

The issuance was managed by Kazakhstan investment companies BCC Invest, Kazkommerts Invest and Halyk Finance.