Debt and Credit Ratings

Within the strategic goal “Maintaining financial stability” the Company is committed to prudent capital allocation policy and focuses on maximization of shareholder return through the cycle. The Company seeks to adhere to conservative financial policy maintaining balanced debt profile and securing a strong liquidity position.

Debt profile

KMG borrows both on the national and global capital markets in line with its flexible, balanced debt management policy. KMG’s gross debt is represented by Bonds and Loans. The debt portfolio is mainly formed in US dollars - the currency of major incomes.

Debt and leverage, USD mln

Debt

Cash and deposits

Net debt

Starting from 2019, the Company revised calculation approach of Earnings before interest, taxes, depreciation and amortization (EBITDA), excluding the finance income from the methodology. In the reports for 2019, and for further periods, the Company calculates EBITDA as “Revenue + Share in profit of JVs and associates, net – Cost of purchased oil, gas petroleum products and refining costs – G&A expenses – Transportation and selling expenses – Production expenses –Taxes other than income tax. Financial metrics for prior periods were recalculated respectively.

Starting from 2019, the Company revised calculation approach of Net debt. In the reports for 2019, and for further periods, the Company calculates Net debt as “Bonds + Loans – Cash & cash equivalents – Short-term bank deposits – Long-term bank deposits”. Financial metrics for prior periods were recalculated respectively.


Total debt by type, %

Loans

Bonds

Total debt by term, %

Current portion

Non-current portion


Total debt by interest rate type, %

Fixed interest rate borrowings

Floating interest rate borrowing

Total debt by currencies, %

US Dollar

Tenge

Other currencies


Bonds

KMG bonds are among the most liquid instruments among those offered by Kazakhstan’s issuers. KMG’s FX-denominated bonds have been historically attractive to a wide range of investors. KMG bonds’ investor base includes thousands of institutional and retail investors, mostly based in the USA, Europe, and Asia. KMG’s Eurobonds are traded on the London Stock Exchange and the Kazakhstan Stock Exchange.

The table shows KMG's outstanding bond issuances as of October 2020

BondsTypeIssue date/ Maturity dateMaturity, yearsCurrencyIssued volume,
US$
Bonds in circulation,
US$
Bonds declared,
US$
Redeemed bonds,
US$
Coupon rate,
% annual
ISIN: REGS/ 144A
EurobondsSenior, unsecured30.04.2013/ 30.04.202310US$1,000,000,000406,564,0001,000,000,000593,436,0004.4%XS0925015074/ US46639UAA34
EurobondsSenior, unsecured19.04.2017/ 19.04.20225US$500,000,000500,000,000500,000,000-3.875%XS1595713279/ US48667QAM78
EurobondsSenior, unsecured19.04.2017/ 19.04.202710US$1,000,000,0001,000,000,0001,000,000,000-4.75%XS1595713782/ US48667QAN51
EurobondsSenior, unsecured19.04.2017/ 19.04.204730US$1,250,000,0001,250,000,0001,250,000,000-5.75%XS1595714087/ US48667QAP00
EurobondsSenior, unsecured24.04.2018/ 24.04.20257US$500,000,000500,000,000500,000,000-4.75%XS1807299174/ US48667QAR65
EurobondsSenior, unsecured24.04.2018/ 24.04.203012US$1,250,000,0001,250,000,0001,250,000,000-5.375%XS1807300105/ US48667QAQ82
EurobondsSenior, unsecured24.04.2018/ 24.04.204830US$1,500,000,0001,500,000,0001,500,000,000-6.375%XS1807299331/ US48667QAS49
EurobondsSenior, unsecured14.10.2020/14.04.203312.5US$750,000,000750,000,000750,000,000-3.5%XS2242422397 / US48126PAA03

Credit ratings

The investment-grade sovereign credit ratings supports KMG’s credit ratings, contributing towards KMG’s strategic initiatives in maintaining access to international capital markets. Maintaining sufficient financial flexibility is considered strategically important to mitigate industry cyclicality while also enabling the pursuit of organic and inorganic investment opportunities.

Ratings

Rating agencyKMG credit rating
OutlookLast rating updateSovereign credit ratings
OutlookLast rating update
Baa3Positive22-Jan-2020Baa3Positive15-Feb-2020
BBNegative27-Mar-2020BBB-
Stable26-Mar-2020
BBB-Stable27-Mar-2020BBBStable21-Feb-2020

Rating is not a recommendation to buy, sell or hold securities. It can be changed, suspended or recalled in any time by agency that rated it. Similar ratings of different types of issuers or bonds do not necessarily have the same meaning. Any single rating should be analysed independently.

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