A landmark financial move has been made by the Eurasian Resources Group (ERG) as it ventures into the realm of public debt instruments. According to recent announcements, ERG has introduced guaranteed coupon bonds valued at up to US$100 million, maturing in three years. This issuance signifies a pioneering effort, being the first non-governmental bonds governed by Kazakhstani laws and backed by the Development Bank of Kazakhstan, making its debut on the Kazakhstan Stock Exchange (KASE).
Investors stand to benefit from this initiative through semi-annual interest payments, with full repayment of the principal upon maturity. The bonds, rated Baa1 by Moody’s Investors Service, indicate an investment-grade status. These securities are issued by the Kazakhstan Aluminium Smelter (KAS), a subsidiary of ERG renowned for producing top-grade aluminum domestically. By participating in organized debt capital markets, ERG aims to fortify its financial strategy while fostering growth.
This issuance not only diversifies ERG's funding avenues but also aligns with its long-term expansion aspirations. Shukhrat Ibragimov, CEO of ERG, emphasized that collaboration with the Development Bank opens doors to novel financing prospects. KAS, based in Pavlodar, has consistently met global standards since its inception 17 years ago. It supplies aluminum globally across Europe, Asia, and Kazakhstan, achieving significant milestones such as producing its fourth million tons of primary aluminum in March 2025.
The proceeds from these bonds will bolster KAS's operational costs and enable prepayments for essential resources like raw materials and electricity sourced locally. This ensures continued production and export capabilities while maintaining over 90% localization within Kazakhstan. Supporting more than 2,000 jobs, this strategic financial decision underscores commitment to sustainable industrial development and economic empowerment.
