/IRBIS, June 26, 00, official press-release for mass media/ - On June 23,
2000 the auction for initial additional offering of CJSC "NOC "KAZAKHOIL"
coupon bonds (KZ72LAG56A20, official list of the KASE securities, category
"A", trade code KZOLb) was held in the trade system of Kazakhstan stock
Today the issue of these bonds is the biggest issue of corporate debt of the
company which works in real sector of the Kazakhstani economy. Until now,
only the banks were using such big loans on domestic market.
Initially, the issue of NOC "KAZAKHOIL" bonds was registered for an amount
of 16 mln U.S. dollars. Along with the registration of the issue, the issuer
provided with necessary documents to undergo the listing at the KASE and
received a positive comments from Listing commission. As a result, by the
decision of the Board of the KASE, on May 25, 2000 coupon bonds of closed
joint stock company "National oil and gas company "KAZAKHOIL" (Astana)
were entered into the Exchange's official list of the securities under the
category "A". Thanks to it the issuer found an opportunity to attract the
money of a big institutional investor of Kazakhstan - private accumulative
pension funds - by offering bonds.
The lead manager and financial consultant of NOC "KAZAKHOIL" bond
issue on domestic market was a Consortium of OJSC "Kazkommerts
Securities" (Almaty), OJSC "Halyk Bank of Kazakhstan" (Almaty), CJSC
"SJSB ABN AMRO Bank Kazakhstan" (Almaty).
When the book of bids was being created among domestic investors it was
revealed that demand for the bonds has noticeably exceeded the issue
amount. It became a reason for the re-registration of the issue, and the
amount was increased to 25 mln U.S. dollars, or 250 th. bonds.
The bonds are denominated in U.S. dollars. Face value - $100.00. Issue
date - June 5, 2000. Circulation term - 2 years. The payments for the bonds
are made in tenges at weighted average rate of the KASE, effective on the
payment date. Coupon is semiannual at 9% APR in terms of U.S. dollars.
Payment dates are December 5, 2000, June 5, 2001, December 5, 2001 and
June 5, 2002. Coupons are paid in the Kazakhstani tenges at weighted
average rate of the KASE, effective on payment date by transferring the
money to the accounts of the bond owners, who were registered 10 days
prior to the maturity day.
The funds, raised by the issue of the bonds, are to be used for general
corporate goals of NOC "KAZAKHOIL" in accordance with the charter, and
first of all, to finance the development of oil fields in Atyrau and Mangistau
Of all the issue, 240 th. bonds amounting to $24 mln are placed by NOC
"KAZAKHOIL" by subscription through the lead manager. However, the
issuer made a decision to place the bonds for the amount of 1 mln U.S.
dollars at the auction held in the trade system of the KASE in order to
support and for further development of the country's stock market.
This additional placement was held at the KASE based on current
regulations of the Exchange on following terms.
The bids are made by the members of the Exchange in the trade system of
the KASE from 11:30AM till 12:00PM Almaty time. The bids will be made at
"clean" price in percents of the bond face value, excluding accumulated
interest for the moment when the auction is held. Accumulated interest on
the offering date is 0.45%. The securities purchased at the auction should be
paid till 5:00PM Almaty time on June 23, 2000.
Existing KASE members of category "P" (with the right to participate in the
trades in private issue securities that were entered into official list of the
Exchange) were allowed to take part in the auction. Complete list of the
members with their contact information is kept up-to-date on the web site of
the KASE (http://www.kase.kz/KASE/Members/).
Other investors could make
their bids through brokerage and dealing companies that are the members of
By the amount of the bids, at additional placement the demand exceeded the
supply of the issuer 2.3 times in nominal terms. The proportion of the bids
made by pension funds equaled 45.65%, that of the banks - 50.01%, from
the clients of the brokers - 4.34%.
After the cut-off NOC "KAZAKHOIL" chose the amount 850 th. U.S. dollars
at the face value (8,500 bonds). Actual borrowing amount equaled
$818,515.00 or KZT116,810,275.65. Weighted average clean (excluding
accumulated interest) price for all satisfied bids has settled at 95.85% of the
face value, with the cut-off price of 95.34%. Weighted average yield of the
bonds equaled 11.76% APR at the offering, with the maximum of 12.08%
APR, which corresponds to semiannual yield of 11.43% APR and 11.74%
Within actual volume of the issue the proportion of satisfied bids made by the
pension assets management companies equaled 5.88% only, that of the
banks - 82.36%, from the clients of the brokers - 11.76%.
After the auction the bonds will circulate on the secondary market of the
country freely, including at the KASE.
At KASE the market-maker of CJSC NOC "KAZAKHOIL" bonds is OJSC
"Kazkommerts Securities". From June 26 throughout the trades this
company will constantly put out offer and bid quotations for at least 30 bonds
(so called minimum volume of mandatory quotations), and maintain the
minimum liquidity of the bonds at the Exchange. Thanks to such
requirements, set to any market-maker of the securities at the KASE, the
difference between the bid and offer price is strictly regulated. This protects
potential investor from unjustified fluctuations of the bond quotations, and
therefore, the market-maker acts as stabilizer of the market prices.
As the director of the asset management department of NOC "KAZAKHOIL",
Beimbet Shayakhmetov says, 45% of the issue, offered by the subscription,
was purchased by commercial banks of Kazakhstan and 55% - by PAPF
and pension asset management companies (PAMC). PAPF and PAMC were
not able to invest into corporate bonds of big domestic companies that work
in perspective sectors of real economy until now. For this reason only the
offering is actually the first case of big investments made into industrial
sector of Kazakhstan through the stock market.
Presently, two other big national companies, that wish to get into domestic
market with their bonds, are undergoing the listing procedure at the KASE -
RGP "Kazakhstan temir joly" and KEGOC. Other organizations are also
considering the possibility of raising the funds on domestic market by issuing
bonds: the biggest Kazakhstani exporter NAC "Kazatomprom" and several
leading Kazakhstani banks of the second tier.
Today, it can be said for sure that gradually the management of the most
progressive companies begins to realize the advantages of the stock market
over the regular financing. Domestic institutional investor is capable of
supporting this interest.