EDB offers bonds underwritten by Kazkommerts Securities at KASE

May 29, 2017 - Cbonds

 

On 24 May 2017, Eurasian Development Bank (EDB) (rated Baa1 by Moody’s and BBB- by Standard & Poor’s) made a KZT 15 billion offer of its three-year bonds at Kazakhstan Stock Exchange (KASE).

This is EDB’s first offer in the Kazakh securities market over three years. Given the issuer’s status and high credit ratings, the offer stirred significant interest among institutional investors. The aggregate value of orders placed by traders totalled KZT 44.4 billion, three times higher than the offer. The Bank, however, decided not to satisfy the demand in full as it planned to raise only a portion of the issued volume. As a result, the stop-out price book exceeded the amount of orders accepted by the Bank by two times. The return on accepted orders amounted to 10.1 percent per annum.

Of particular importance is that this offer was market-oriented and competitive. The investors that took part in the auction included brokers, Kazakhstan’s largest banks and major insurers. Overall, six traders placed 16 orders at the special auction. This is also the largest offer in the Kazakh securities market this year that can become a benchmark for quasi-public institutions that plan to issue and place their debt securities in the near future.

Kazkommerts Securities was the financial advisor and underwriter for EDB in the course of listing and placement.

“One of the objectives of this offer is to understand Kazakhstan’s current demand for the Bank’s tenge-denominated bonds. The results of this auction let us consider making other offers at KASE as well,” Dmitry Ladikov-Roev, Managing Director for Assets and Liabilities at EDB, commented.

“Bonds issued by international financial institutions are among the most reliable and risk-free instruments in Kazakhstan’s market today. The auction resulted in that the number of orders exceeded the offer significantly. This confirms once again that EDB’s bond placements are an important event in the Kazakh securities market. The fact that such top issuers make offers in the local market suggests that the situation has become more favourable for raising funds by quality issuers,” Zhaksybek Chingiz, Chairman of the Management Board at Kazkommerts Securities, added.
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Issuer, issue numberEurasian Development Bank, 10.10% 24may2020, KZT
Type of debt instrumentDomestic bonds
Issue statusoutstanding
Type of placementPublic
Par, currency of issueKZT 1,000
Amount15,000,000,000
Registration date04/07/2017
State registration numberKZP04Y03E904
ISINKZ2D00003894
Start of placement05/24/2017
End of placement05/24/2017
Date of circulation start05/24/2017
Coupon10.10%
Coupon frequency2 time(s) per year
Settlement date05/24/2017
Maturity date05/24/2020
Issue ManagersUnderwriter: Kazkommerts Securities
Trading floorKASE, EABRK240520
Issuer: Eurasian Development Bank
Issuer profile:

Eurasian Development Bank (“EDB” or the “Bank”) is an international financial organisation established to promote economic growth in its member states, extend trade and economic ties between them ... more

Outstanding issues:
10 issuesRUB50,000,000,000
2 issuesUSD1,000,000,000
5 issuesKZT115,000,000,000
Issuer rating:
Moody's Investors ServiceBaa1/StableLT- foreign currency03/19/2015
S&P Global RatingsBBB-/StableForeign Currency LT10/03/2016
S&P Global RatingsNR/Local Currency LT09/24/2010
S&P Global RatingsNR/LT National Scale (Russia)06/02/2017
S&P Global RatingskzAA/LT National Scale (Kazakhstan)10/09/2015
Fitch RatingsWithdrawn/LT Int. Scale (foreign curr.)09/25/2013
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