KazMunaiGas Exploration Production, a subsidiary of the Kazakh state oil and gas company, raised $2.03 billion in the largest initial public offering in the country’s history. KazMunaiGas sold 40% of the subsidiary in an offering of shares locally and global depositary receipts placed with institutional investors. The issue was split almost evenly between the Kazakh Stock Exchange and the London Stock Exchange. ABN AMRO Rothschild and Credit Suisse were joint global coordinators.
The previous record IPO for Kazakhstan was a $1.16 billion issue by Kazakhmys, the country’s largest producer of copper, which listed on the London Stock Exchange in October 2005.
“Kazakhstan’s massive natural resource reserves and its robust economic and regulatory framework are making it a magnet for foreign investment,” says Francis Fitzherbert-Brockholes, the lead White & Case partner giving legal advice on the deal. With Kazakhstan’s economy booming, an increasing number of its companies are seeking to tap global capital markets, he says.
Meanwhile, in the first-ever Kazakh tenge-denominated Eurobond, CenterCredit International issued approximately $210 million equivalent of five-year notes with a coupon of 8.25%. Although the notes are denominated in tenge, all payments of principal and interest are made in dollars, since the tenge is not yet a settlement currency on Euroclear. Morgan Stanley was the sole lead manager of the issue. Bank CenterCredit guaranteed payment of principal and interest on the notes, which were issued through a Netherlands-based special purpose vehicle.