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Long-term indexed Treasury bills of Kazakhstan (MUIKAM, Kazakhstan)

Category — Sovereign Bonds
“MUIKAM” Long-term indexed treasury bills (in the Kazakh language, Мемлекеттік ұзақ мерзімді индекстелген қазынашылық міндеттеме) are long-term indexed treasury bills of the Republic of Kazakhstan, which are coupon-bearing securities.

Long-term indexed treasury bills are issued with the maturity over five years, are divisible by twelve months and have a nominal value of KZT 1,000. Long-term indexed treasury bills are placed on the second to last business day of the month, if the issuer does not stipulate a different date.

They are placed and redeemed at nominal value, with an indexed coupon being paid within the maturity period. The calculation base for coupon calculation is 30 days in the assessment month/360 days in the assessment year. The indexed coupon on long-term indexed treasury bills is paid once a year on days set by the issuer with a corresponding frequency. Payment should be made on the fifth business day of the month every full 12 months during the maturity period.

Money invested in long-term indexed treasury bills is indexed by calculating the indexed coupon received as a sum of the fixed coupon set at placement and the inflation index over the last coupon period.

The sum of the indexed coupon is determined by the following formula:
S=N*I/100+C , where
• S (KZT) – sum of the indexed coupon on “MUIKAM” bills to be paid;
• N (KZT) – nominal value of the corresponding number of “MUIKAM” bills to be paid;
• I (%) – inflation index for the expired coupon period to be paid, whilst:
I=(((I1/100)*(I2/100)*(I3/100)*…*(In/100))-1)*100, where I1, I2, I3,…,In are consumer price indices for the respective months of the coupon period, with values rounded to three decimal places;
• C – amount of the fixed coupon (C=N*K, where К (%) is the value of the fixed coupon determined at placement).

1) The Consumer price index is published on a monthly basis by the Agency on Statistics of the Republic of Kazakhstan;
2) If the inflation index for the expired period is negative, the inflation index value is equal to zero;
3) All operations with long-term indexed treasury bills are carried out via a primary dealer.

The first issue of “MUIKAM” bills took place on June 6, 2007. The issue amounted to KZT 24.504 billion, with a maturity of 2,192 days, the redemption occurred on June 6, 2013.

Later on, in 2008, two more issues were placed – the February issue of KZT 16.405 billion and the April issue of KZT 12 billion. The maturity of the first issue was 6 years (2,192 days), while the maturity of the second one was 7 years (2,556 days).

Since 2015 the “MUIKAM” long-term indexed treasury bills have not been placed, but they have been included in the “Rules of Issue, Placement, Circulation, Servicing and Redemption of the Government Treasury Bills of the Republic of Kazakhstan” (ed. 13/12/2018).
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