KazAgroFinance becomes the first issuer over two years to place five-year maturity domestic bonds totalling KZT 8 billion for a wide range of investors

On 14 November 2016, the Kazakhstan Stock Exchange (KASE) made an initial placement of KazAgroFinance’s tenge-denominated bonds for a total of KZT 8 billion, maturing in five years.

Halyk Finance is the manager of the issuing consortium and financial advisor for the transaction and Eurasian Development Bank and Tsesna Capital are the co-underwriters.

The placement is unique in that it involves private institutional investors and not the state-owned Single Pension Savings Fund, as it was practised in recent years. All participants in the transaction believe this suggests that the market is ready and has potential for such placements.

Ainur Seitkasimova, First Deputy Chair of the Management Board at KazAgroFinance: "Placing local public bonds for a wide range of investors is our consistent strategy to improve KazAgroFinance's investment attractiveness. Investors' trust builds on the company's stable financial position and the transparency of its operations. In recent years, the company has been thriving to diversify the instruments and sources of finance to promote the development of Kazakhstan's agro-industrial sector. We hope that the success of our debut issue will attract investors' attention to Kazakhstan's agrarian sector alongside with the oil and banking sectors."  

Farkhad Okhonov, Director of Financial Consulting and Underwriting at Halyk Finance: "This successful placement was preceded by diligent work on the part of Halyk Finance as the manager of the issuing consortium, in cooperation with KazAgroFinance and the co-underwriters, to determine the issue parameters, which in the end ensured investors' interest. We hope that, in the context of the continuing decrease in the interest rates of the National Bank's notes, KazAgroFinance's transaction will clear the way for new public placements of tenge-denominated corporate bonds the domestic market has not seen for over two years already."

Dmitry Ladikov-Roev, Managing Director for Assets and Liabilities at EDB: "We have been successfully cooperating with KazAgroFinance for a long time and we're sure in its financial stability. We see our participation in the bond issue not only as provision of resources for KazAgroFinance to purchase agricultural equipment, but also as support to the development of the capital market in Kazakhstan. This is in line with the bank's strategy aimed to promote development and economic integration of its member states. We hope that this successful placement will foster an increase in investments in Kazakhstan's agriculture and help to advance the country’s capital market further."

Samat Balkenov, Chairman of the Board at Tsesna Capital: "KazAgroFinance's bond placement is our first try and the groundwork for the future. Before, there were practically no placements for such an amount and period without the participation of the Single Pension Savings Fund."

Fitch has rated the bonds at BB+.

In accordance with the resolution of KASE's Listing Commission dated 9 November 2016, the issue was included in KASE's official list as "debt securities of entities from quasi-public sector."