On November 1, 2022, KTZ made a full buyback of its Eurobonds maturing in 2042 in the amount of USD 882,978,000 at face value, reports Railway Supply magazine citing Rail-news.kz.

KTZ

Funds for the repurchase of KTZ Eurobonds were provided by the sole shareholder of Samruk-Kazyna JSC in the form of a bonded loan placed on the Kazakhstan Stock Exchange JSC for a period of 3 years.

This transaction was carried out as part of the ongoing work to improve the financial condition of the Kazakhstan Railways.

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The deal was arranged during a favorable period of declining prices of the issued Eurobonds (in the fall of 2021, the price reached 145% of the face value), which made it possible to avoid potential losses during the redemption. In addition, the deal made it possible to reduce annual coupon costs by $44 million, replace Eurobonds with a more flexible financial instrument, and subsequently refinance in tenge in order to reduce currency dependence.

KTZ also made a cross-currency swap of dollar liabilities for Swiss franc liabilities (hedging) and brought the currency of interest and principal expenses in line with the currency of revenue. The cross-currency swap further reduced the annual interest cost of the Notes by $22 million through 2025.

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