By: African mining market

Eurasian Resources Group informs about the issuance of guaranteed coupon bonds with a three-year maturity for a total amount of up to US$100 million. For the first time on the Kazakhstan securities market, the issuance of non-government bonds regulated by local law is carried out with the support of JSC “Development Bank of Kazakhstan” as a guarantor, which is irrevocable. Such a form of guarantee is a fundamentally new instrument in the Kazakhstan securities market. The bonds are placed on the Kazakhstan Stock Exchange (KASE) by JSC “Kazakhstan aluminium smelter”, which is part of ERG and is the only producer of primary high-grade aluminum in the country.

For ERG, this marks the first time in the company’s history that it has issued bonds, which represents a major step for the Group as it moves forward to establishing strong position in the organised debt capital markets. Kazakhstani, non-government bonds issued by ERG also receive an international investment rating, which creates a new precedent in the country. Moody’s has assigned the bonds an international investment grade credit rating of Baa1.

The bonds listed on the KASE are nominated in US dollars. In total, the offer comprises up to 100,000 bonds with a nominal value of US$1,000 per note and semi-annual coupon payments, a maturity of three years. The principal will be repaid in a single payment at the end of the term.

“Eurasian Resources Group is issuing its first public debt instrument in the company’s long history. This expands our financing options, which is in line with our long-term business growth and capacity expansion program,” Shukhrat Ibragimov, CEO of ERG and its Chairman of the Board of Directors, said. “This is for the first time that Kazakhstani, non-government bonds regulated by local legislation received an international investment rating, which opens up additional opportunities for those companies in the country that want to attract financing and launches a new segment in the stock market. I appreciate how ERG and JSC “Development Bank of Kazakhstan” have successfully worked together on it,” he added.

The bonds have been issued with the support of a guarantee by JSC “Development Bank of Kazakhstan”, which is unconditional and irrevocable and is governed by the laws of Kazakhstan ensuring a high level of reliability for investors. The settlement agent for the issuance is Central Securities Depository JSC.

ERG plans to use the funds raised to finance the operating expenses of Kazakhstan aluminium smelter, as well as prepayment for supplies of raw materials and electricity from domestic producers in Kazakhstan. This supports the production and exports of aluminum.