First Heartland Securities raises more than 62% of local investments in debut placement of Sovereign Wealth Fund "Samruk-Kazyna"

Sovereign Wealth Fund “Samruk-Kazyna” JSC (Fund) carried out the debut issue of five-year Eurobonds with a total volume of USD500 mln with a coupon rate of 2.0%. For the first time, the orders for purchase of the Fund’s bonds were collected on three markets simultaneously – on the London Stock Exchange (LSE), on Kazakhstan Stock Exchange (KASE) and on the market of the Astana International Financial Center (AIX).

First Heartland Securities and Freedom Finance acted as Kazakhstan Lead Managers, while Citi, MUFG, UBS and VTB Capital acted as international organizers and bookrunners of the issue.

The debt securities were issued in accordance with English law and offered in accordance with Rule 144A and Regulation S.

During the building of the order book, the total demand for Eurobonds exceeded the initial offer by almost three times. The volume of executed order submitted by Kazakhstan’s investors amounted to USD216 million, or 43% of the total ledger, of which 62% is the volume of investments raised by First Heartland Securities (FHS). The main volume of the local orders was collected through KASE – USD159 million, or 74% of the local demand, the rest of the volume in the amount of USD57 million was purchased by FHS clients through the AIX platform.

Thus, the final book was distributed among investors from Kazakhstan (43%), UK (19%), Europe (excluding UK) (18%), USA (16%) and Asia (4 %). The main class of investors is represented by management companies and funds (47%), banks (46%), as well as insurance companies and pension funds (7%).

A significant excess of demand over offer also allowed to reduce the range for the transaction from 2.5% to 2.3% +/- 5 basis points, and to fix the final yield at 2.25%, setting a record low spread to sovereign Eurobonds.

“It is a great honor for us to be among the organizers of the debut placement of Eurobonds of Samruk-Kazyna JSC. We are grateful for the trust placed in us, and we can confidently speak of success in the local and international markets. In this deal, FHS managed to attract a record number of Kazakh investors in the amount of more than 62% of all local investments. The results achieved set a new benchmark in building the yield curve in US dollars for Kazakhstan’s issuers and provided a unique opportunity for investors to invest their capital in quality bonds” – commented Evgeny Pan, Chairman of the Management Board of FHS.

Information about First Heartland Securities JSC:

First Heartland Securities JSC is the Kazakhstan brokerage company with a proper license to carry out brokerage and dealer activities with the right to maintain clients’ accounts as a nominee holder. FHS is part of the First Heartland Group, which also includes a commercial bank, First Heartland Jusan Bank, and its subsidiaries.

Information about Samruk-Kazyna JSC:

Samruk-Kazyna JSC is the national management holding with 100% state participation, which has received a rating of “BBB” from Fitch, “Baa2” from Moody’s, and “BBB-” from S&P. The Samruk-Kazyna JSC Group of Companies includes enterprises of the oil and gas and transport and logistics sectors, the chemical and nuclear industries, the mining and metallurgical complex, energy and real estate. The fund’s assets are worth about USD69 billion.

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