UPDATE 1-Kazakhstan mulls return to debt market with Eurobond in May
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By Raushan Nurshayeva
ALMATY, March 27 (Reuters) - Kazakhstan may issue a sovereign Eurobond in May, returning to international debt markets after a 14-year break and paving the way for borrowing by state-controlled companies.
"We tentatively plan the issue for May," Kazakh Finance Minister Bakhyt Sultanov told Reuters. "According to our preliminary estimates, the issue volume will be $1 billion."
Kazakhstan, the second-largest post-Soviet oil producer after Russia, last sold a Eurobond in 2000. It cancelled a planned return to the market in 2010 after securing a $1 billion loan from the World Bank.
The government said in September that it had put a long-planned $1 billion Eurobond on hold because it did not need cash badly and market conditions were not very good.
"We are now working with advisers," Sultanov said. "The situation on world markets is a bit volatile at the moment so, depending on how it develops, we will seek a good moment to tap the market."
He said the Finance Ministry was now working with the central bank "to build the best yield curve (of the future Eurobond) for both sovereign borrowing and borrowing by quasi-public corporations".
Kazakhstan's sovereign wealth fund, Samruk-Kazyna, said last month that it expects its subsidiaries to borrow 800 billion tenge ($4.4 billion) this year, around half of it on external markets.
The fund's subsidiaries include the oil and gas company KazMunaiGas, Development Bank of Kazakhstan, the fixed-line monopoly Kazakhtelecom, the shipping company Kazmortransflot, the state uranium company Kazatomprom and the railway company Kazakhstan Temir Zholy.
Kazakhstan is rated 'BBB+' with a stable outlook by ratings agencies Standard & Poor's and Fitch and 'Baa1' with a positive outlook by Moody's. (Reporting by Raushan Nurshayeva; Writing by Dmitry Solovyov; Editing by Larry King)
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