LONDON: State-owned Development Bank of Kazakhstan JSC (DBK) sold on Thursday the first dollar-bond in the Commonwealth of Independent States (CIS) region since Russia's invasion of Ukraine on Feb 24.
The investment grade-rated bank issued US$500 million in three year dollar-denominated bonds with a coupon of 5.75 per cent - a touch below the final price guidance of 5.95 per cent, according to a bank involved in the deal.
The deal was initially expected for last week, though analysts had been sceptical how much demand there would be for an issue from the region.
The wider backdrop for the sale was also challenging with global financial markets gyrating in the run up to the US Federal Reserve lifting interest rates by 50 basis points on Wednesday, its biggest rate hike in 22 years.
DBK is selling the bonds in conjunction with a tender offer on its existing notes maturing in December which were quoted with a bid yield of just under 5 per cent, according to Refintiv data.
Russia has been severed from global financial markets since launching its war on Feb 24 with bond issuance in the region grinding to an abrupt halt. Russian corporates - many of them state-run and in the energy and financial sectors - had been prolific issuers in the run up to the war, and set the tone for much of the issuance in the region.
Kroll Issuer Services Limited is the tender agent while JPMorgan Securities PLC, Citigroup Global Markets Limited, JSC Halyk Finance and MUFG Securities EMA Plc are the joint dealer managers, according to a statement by one of the banks.
Fitch Ratings affirmed DBK's rating at 'BBB' in early March, with a stable outlook.