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 3 November 2020
| Bonds | Type | Issue date/ Maturity date | Maturity, years | Currency | Issued volume, US$ | Bonds in circulation, US$ | Bonds declared, US$ | Redeemed bonds, US$ | Coupon rate, % annual | ISIN: REGS/ 144A |
|---|---|---|---|---|---|---|---|---|---|---|
| Eurobonds | Senior, unsecured | 19.04.2017/ 19.04.2027 | 10 | US$ | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | - | 4.75% | XS1595713782/ US48667QAN51 |
| Eurobonds | Senior, unsecured | 19.04.2017/ 19.04.2047 | 30 | US$ | 1,250,000,000 | 1,250,000,000 | 1,250,000,000 | - | 5.75% | XS1595714087/ US48667QAP00 |
| Eurobonds | Senior, unsecured | 24.04.2018/ 24.04.2025 | 7 | US$ | 500,000,000 | 500,000,000 | 500,000,000 | - | 4.75% | XS1807299174/ US48667QAR65 |
| Eurobonds | Senior, unsecured | 24.04.2018/ 24.04.2030 | 12 | US$ | 1,250,000,000 | 1,250,000,000 | 1,250,000,000 | - | 5.375% | XS1807300105/ US48667QAQ82 |
| Eurobonds | Senior, unsecured | 24.04.2018/ 24.04.2048 | 30 | US$ | 1,500,000,000 | 1,500,000,000 | 1,500,000,000 | - | 6.375% | XS1807299331/ US48667QAS49 |
| Eurobonds | Senior, unsecured | 14.10.2020/14.04.2033 | 12.5 | US$ | 750,000,000 | 750,000,000 | 750,000,000 | - | 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 agency | KMG credit rating | Outlook | Last rating update | Sovereign credit ratings | Outlook | Last rating update |
|---|---|---|---|---|---|---|
| Baa3 | Positive | 14-Dec-2020 | Baa3 | Positive | 18-Dec-2020 | |
| BB | Negative | 28-Jan-2021 | BBB- | Stable | 26-Mar-2020 | |
| BBB- | Stable | 27-Mar-2020 | BBB | Stable | 21-Aug-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.
