Kazakhstan’s Ministry of Finance successfully placed $2.5bn in international bonds on June 24, marking one of the country’s largest debt offerings of recent years and setting a benchmark for low-cost borrowing among similarly rated emerging market issuers.

The dual-tranche offering comprised $1.35bn in seven-year notes with a 5% coupon and $1.15bn in 12-year bonds priced at 5.5%. The ministry noted that the transaction was oversubscribed by a factor of two, reflecting "strong confidence from global investors" across Europe, North America, Asia and the Middle East.

The eurobonds achieved yields below those of BBB-rated peers and were priced competitively in relation to A-rated sovereigns such as Poland, Saudi Arabia and Chile, Kazakhstan’s Finance Ministry said.

“Despite challenging market conditions, we achieved competitive pricing comparable to higher-rated A/AA sovereigns,” the ministry stated.

The issue will be listed on the London Stock Exchange (LSE), the Astana International Exchange (AIX) and the Kazakhstan Stock Exchange (KASE).

Proceeds will be used to refinance Kazakhstan’s outstanding eurobond obligations due in 2025.

The eurobond sale followed a roadshow in London that drew participation from 180 institutional investors. The offering sets a 2024 record for the lowest coupon levels among A/BBB-rated sovereign issuers, according to the ministry.

The AIX confirmed on June 24 that the offering initially targeted yields of 5.25% for the seven-year bond and 5.625% for the 12-year bond, with minimum tranche sizes of $500mn each.

Kazakhstan last tapped the international debt market in October 2024 with a $1.5bn 10-year bond priced at 4.714%. That issuance carried a spread of 88 basis points over US Treasuries and was four times oversubscribed, according to the ministry.

The government has forecast a budget deficit of 2.7% of GDP in 2025. Kazakhstan’s ability to secure favourable terms on the latest bond issue comes amid a broader effort to diversify its financing sources and maintain fiscal stability.