KazMunaiGaz National Co. will be able to cut its foreign debt by raising $4 billion from Kazakhstan’s National Oil Fund, according to its parent, sovereign wealth fund Samruk-Kazyna.
The state energy producer will sell two tranches of bonds to the National Oil Fund in 2013 and 2015. The notes will comply with an “international format, allowing for increased yields and exceptional liquidity for National Oil Fund investments,” Samruk-Kazyna, which holds the government’s 100 percent in KazMunaiGaz, said in an e-mailed statement today. The National Oil Fund is managed by the central bank.
KazMunaiGaz will use the funds for the Kashagan oil field development, President Nursultan Nazarbayev’s press office said this week. The Astana-based oil producer has $3.2 billion in bonds and loans coming due next year and has a total of $13.4 billion of debt, according to data compiled by Bloomberg.
KazMunaiGaz plans to increase investment spending 7 percent to $3.8 billion this year, followed by $2.3 billion in 2013, according to Raiffeisen Research. The company may consider buying back its Eurobonds due in 2015 “given the rather high coupon rate,” Raiffeisen analyst Alexander Sklemin said in a Dec. 14 report.
Samruk-Kazyna didn’t elaborate on how KazMunaiGaz’s debt may be lowered in the statement. Sayora Iskakova, an Astana-based spokeswoman for the fund, declined to comment when Bloomberg News called.