BI Group Subsidiary Raised $11.2 Million on the AIX Stock Exchange

The interest rate is 18% per annum

On March 31 Megastroy Ltd, which is a part of BI Group, issued 4.8 billion tenge ($11.2 million) cost bonds with 12 months of maturity and an interest rate of 18%.

According to the data published on the AIX website, the nominal value of one bond is $2.35 with warrant payment frequency per half a year.

Jysan Invest company has served as a financial consultant and bookrunner of the deal.

As Askar Tashtitov, managing director from Freedom Finance noted, this deal is a good example of the professional approach by Jysan Invest because local market participants were just happy to take a part in the issuing by Megasroy.

«As far as I know, there were a bunch of private investors instead of one or two professional players who could buy out everything. It means the issuing was attractive,» he told the Kursiv edition.

Given that the bond’s maturity is one year, it’s a good alternative for a banking deposit, the expert noted.

«No one commercial bank can make a similar offer. I mean, people are very interested in the stock market these days as they can easily find out what kind of instruments would be better to use,» Tashtitov said.

KASE and AIX have become more attractive for bond issuing recently. Since the end of 2019, several microfinance organizations have been using these exchanges to raise money. Usually, they place bonds with 20% interest in tenge and 9% in USD. The maturity of such bonds is about two to three years.
Last week OnlineKazFinance, which is a part of IDF Eurasia, started the third issuing of bonds. The total cost of bonds is seven billion tenge ($16.4 million) with 18.5% interest during the first two years of maturity and 18% during the third year.
On March 31 Capital Leasing Group completed a bond placement with similar characteristics. The company raised on the KASE 1.3 billion tenge ($3 million) with 16% of interest and 2.8 years of bond maturity. 

Freedom Finance was an underwriter of both bond replacements.

Megastroy Ltd. was established in 2007. Its major stakeholder is BI Development; the company holds 99% shares of Megastroy, which is a contractor for business centers, apartments and other types of building construction.

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