“KazAgro” National management holding” JSC carried out debut placement of Eurobonds issue for amount of $1 billion
On May 17, 2013 the debut Eurobond offering of “KazAgro” National management holding” JSC (hereinafter – KazAgro) was carried out in the amount of U.S. $ 1 billion for a period of 10 years, at a rate of 4.625% per annum.Joint bookrunners of the deal were HSBC, JP Morgan, an offer of securities at the domestic market was carried out with the help of “ATF Finance”.
In middle of May, a series of meetings were held by Kazagro with key global institutional investors in the U.S. and the UK and in Almaty. According to the results of the meetings positive opinions about the credit quality of KazAgro were received that would accelerate the offering, given the current favorable market situation.
Pricing parameters of the issue were announced on May 17 and caused a considerable interest among institutional investors. The final order book amounted to $3.3 billion from more than 200 investors, which is a direct result of considerable preparatory documentation and marketing work of Kazagro in recent months. The deal was closed in the price range of 4.625% on the same day.
This deal has fixed a record low cost of debt debut issue of Kazakhstan issuers for such a long circulation period. Offering by KazAgro is the first ever issue from Kazakhstan implemented not from the financial, oil and gas, energy and steel sectors of the Republic, that opens up significant opportunities for other potential issuers from agricultural and food industries.
The considerable success of the debut issue by KazAgro determines the status of the Holding as a first-class borrower along with other quasi-sovereign issuers from Kazakhstan, as well as greatly strengthens the image of KazArgo at global capital markets.
Commenting on the results of the placement, Dulat Aitzhanov, the Chairman of the Executive Board of “Kazagro”, said: “We are pleased with the completion of debut Eurobonds offering of the Holding. Because of the nature and state of the importance of our activities, from the beginning of preparatory work on the project, the objective of KazAgro was attraction of significant financial resources for a long period of time and at the lowest possible rate. The proceeds from the offering will be sent to realization of long-term priority projects under the Agro-Industrial Development Program “2020”.
Statistics of distribution of investors base in the region:
The Great Britain: 35%
Continental Europe: 15%
Main term of the deal:
Issuer: “KazAgro” National management holding” JSC
Issue ratings: BBB+ (stable prognosis) / BBB (stable prognosis)
Debt type: senior unsecured
Issue format: Reg S/ 144A
Maturity date: May 24, 2023
Calculation date: May 24, 2013 (Т+5)
Issue amount: $1,000 million
Offering cost: 100,00%
Listing: Irish and Kazakhstan stock exchange
“KazAgro” National management holding” JSC implements the state policy on development of agribusiness complex of Kazakhstan by means of providing effective management of investment assets of companies included into its structure.
The Holding includes “Food contract corporation” National company” JSC, “KazAgroProduct” JSC, “KazAgroFinance” JSC, “Agrarian credit corporation” JSC, “Fund for financial support of agriculture” JSC, “KazAgroGarant” JSC and “Kazagromarketing” JSC.