Kazakhstan Temir Zholy's $1bn Eurobonds to start trading on KASE on 19 October

Two dollar bonds issued in April by Kazakhstan Temir Zholy (KTZ), the state-owned national railway company, will begin trading on the Kazakhstan Stock Exchange (KASE) on 19 October, the exchange said on 16 October. Each of the notes, which carry the KASE codes TMJLe7 and TMJLe8, is $500 million in size. The five-year line pays a semi-annual coupon of 4.875 per cent and matures on 29 April 2031; the ten-year line pays 5.25 per cent and matures on 29 April 2036.

Both bonds sit on KASE's main market in the "bonds" category and will be quoted in US dollars as a percentage of face value, on a clean-price basis to four decimal places, according to the notice. KASE's instrument pages for TMJLe7 and TMJLe8 show that the notes were admitted to the official list on 29 April, the day the issue settled, with no trading on the exchange since, and that no market maker is registered for either line. The first coupons fall due on 29 October.

Pricing and demand

KTZ sold the notes under a new $3 billion guaranteed global medium-term note programme, with JSC Kaztemirtrans and KTZ-Freight Transportation LLP as guarantors, according to terms filed with KASE on 22 April by Teniz Capital Investment Banking, one of the local lead managers. The notes are senior unsecured, governed by English law and were offered under Regulation S and Rule 144A, with expected issue ratings of Baa2 from Moody's and BBB- from Fitch. The filing set initial price thoughts of about 5.5 per cent for both tenors and said net proceeds would be used for general corporate purposes.

The final yields were 5 per cent on the five-year tranche and 5.375 per cent on the ten-year, 50 and 12.5 basis points inside the initial guidance, with orders of about $3.9 billion, almost four times the amount on offer, Teniz Capital said on 23 April. The same notice said "local demand for the instrument was subdued", although KASE had run subscriptions in its trading system for the five-year and the ten-year tranches on 22 April. Citi, J.P. Morgan and Société Générale were joint global coordinators, with Abu Dhabi Commercial Bank, Deutsche Bank, Oman Investment Bank and Standard Chartered as joint lead managers and Teniz Capital and Freedom Broker leading in Kazakhstan, according to KTZ's 20 April mandate announcement.

Anchor investor and listings

The 22 April terms said a development finance institution had expressed its intention to buy up to 20 per cent of each tranche. The European Bank for Reconstruction and Development said on 29 April that it was investing up to $125 million in the issue, to help modernise passenger stations across Kazakhstan, with further upgrades financed by the bond along the Trans-Caspian Corridor. The notes were listed on the Astana International Exchange on 29 April, and the EBRD said they were also listed on the London Stock Exchange.

Issuer and owner

KTZ's sole shareholder is the sovereign wealth fund Samruk-Kazyna, according to KASE. Data on KTZ's KASE issuer page show total assets of KZT 8.75trn and liabilities of KZT 6.15trn on 1 July, and net income of KZT 191 billion for the first half of 2026. The company owns and operates a 16,400-kilometre rail network, according to the EBRD.

The KASE line opens as KTZ and Samruk-Kazyna prepare an initial public offering. On 9 September the fund said the IPO was scheduled for 2026 on Hong Kong Exchanges and Clearing (HKEX), the London Stock Exchange and the Astana International Financial Centre's exchange, and that an A1 listing application had been submitted to HKEX at the end of June. Nurlan Zhakupov, chairman of the fund's management board, said the next day that up to 20 per cent of the company's shares could be offered to investors, Kapital.kz reported, citing Interfax-Kazakhstan. The same report put KTZ's balance-sheet debt at KZT 3.8trn and its nominal debt at KZT 4.7trn.

The parent has also widened its own funding base. On 16 October Samruk-Kazyna said it had priced its debut offshore renminbi bonds, raising RMB 3 billion in three- and five-year tranches with coupons of 2.15 per cent and 2.30 per cent, admitted to trading in Hong Kong and on the Astana International Exchange. KTZ continues to service its tenge debt on KASE: on 15 October it paid a KZT 17.25 billion coupon on its TMJLb8 bonds, the exchange said.