KazMunayGas wraps tenders for four issues, gets consents to call rest

By Susanna Moon

Chicago, May 3 – JSC NC KazMunayGas and KMG Finance Sub BV announced the results of the tender offers for four series of notes issued under their global medium-term notes program.

The tender offers ended at 5 a.m. ET on May 1. The early tender deadline is 11:59 p.m. ET on April 16. The offers began April 3.

The issuers also were soliciting consents to call the notes and obtained the needed votes to redeem each series on May 11, according to a company update on Thursday.

Settlement has been set for May 4.

The meetings were held May 3 in London. The record date is 5 p.m. ET on April 16.

The tender results are as follows, with pricing for each $1,000 principal amount:

• Tenders for $1,182,359,000, or 86.21%, of the $1,371,437,000 outstanding $1.5 billion 7% notes due 2020 with total purchase price of $1,089.50, base price of $1,069.50, early consent fee of $20.00 and early redemption amount of $1,069.50; voting instructions for another $119,438,000, bringing total voting instructions in favor of the proposal to $1,301,797,000, or 94.92%;

• Tenders for $963,799,000, or 85.27%, of the $1,130,274,000 outstanding $1.25 billion 6 3/8% notes due 2021 with total purchase price of $1,093.50, base price of $1,073.50, early consent fee of $20.00 and early redemption amount of $1,073.50; voting instructions for another $80,079,000, bringing total voting instructions to $1,043,878,000, or 92.36%;

• Tenders for $117,137,000, or 95.1%, of the $123,177,000 outstanding $500 million 4 7/8% notes due 2025 with total purchase price of $1,055.50, base price of $1,025.50, early consent fee of $30.00 and early redemption amount of $1,025.50; and

• Tenders for $473,053,000, or 92.35%, of the $512,249,000 outstanding $2 billion 5¾% notes due 2043 with total purchase price of $1,088, base price of $1,048, early consent fee of $40.00 and early redemption amount of $1,048; voting instructions for another $31.44 million, bringing total voting instructions to $504,493,000, or 98.49%.

As of the early deadline, holders had tendered $1,181,533,000 of the 2020 notes, $959,707,000 of the 2021 notes, $117,137,000 of the 2025 notes and $472,553,000 of the 2043 notes.

The total purchase price includes an early tender premium for each $1,000 principal amount of notes tendered by the early deadline of 11:59 p.m. ET on April 16.

The issuer previously said it was making the offers along with issuing new notes in order to allow the group to proactively manage its upcoming debt redemptions, to lower the average cost of its debt portfolio and to extend the group’s average debt maturity profile.

The amendments were being sought “to help achieve a harmonization of covenants across the issuer's bond portfolio,” the previous release noted.

Holders who tendered their notes and concurrently consented to the proposal by the early deadline will receive the total purchase price.

Holders also could receive an early consent fee without tendering their notes. Those who gave their consents without tendering notes after the early deadline will not receive consent fees or other payment.

The issuer also will pay accrued interest.

As the issuer obtained the needed consents, the notes will be redeemed on May 11.

Specifically, the issuer will redeem for each $1,000 principal amount: $189,078,000 of the 2020 notes at a purchase price of $1,069.50; $166,475,000 of the 2021 notes at a price of $1,073.50; $6.04 million of the 2025 notes at a price of $1,025.50; and $39,196,000 of the 2043 notes at a price of $1,048.

The offer contained a new financing condition.

As reported, the issuer issued $3.25 billion of notes in three tranches due 2025, 2030 and 2048 on April 24: $500 million of seven-year notes priced at par to yield 4¾%; $1.25 billion of 12-year notes priced at par to yield 5 3/8%; and $1.5 billion of 6 3/8% notes due April 2048 priced at 99.005 to yield 6.45%.

The dealer managers and solicitation agents are Citigroup Global Markets Ltd. (+44 20 7986 8969 or liabilitymanagement.europe@citi.com), JSC Halyk Finance (+7 727 357-3177 or IB@halykfinance.kz), J.P. Morgan Securities plc (+44 20 7134 2468 or em_europe_lm@jpmorgan.com), MUFG Securities EMEA plc (+44 20 7577 4048/4218 or DCM-LM@int.sc.mufg.jp) and UBS AG, London Branch (+44 20 3719 4210, 888 719-4210, +44 20 7568 2133 or ol-liabilitymanagement-eu@ubs.com).

The tender and tabulation agent is Lucid Issuer Services Ltd. (fax +44 20 3004 1590, +44 20 7704 0880, kmg@lucid-is.com or https://portal.lucid-is.com).

KazMunayGas is an Astana, Kazakhstan-based state-owned oil and gas company.

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