Kyrgyzstan is preparing a large-scale placement of state treasury bonds (STBs) worth 6.13 billion som — the equivalent of $70.1 million. The coupon on the securities will range from 5% to 12.86% per annum, but the payments are denominated in som, so if the national currency weakens, their dollar value will decline.
The state is raising funds on the domestic market, while banks, companies and private investors receive securities with a predetermined yield. The issue volume is still preliminary, and the coupon on long-term securities is noticeably lower than on three-year ones.
How much Kyrgyzstan will borrow and at what coupon
The placement will take place on two platforms. The Ministry of Finance plans to raise 5.03 billion som ($57.5 million) through the National Bank's auction system and another 1.1 billion som ($12.6 million) on the Kyrgyz Stock Exchange.
The ministry has scheduled six issues through the National Bank with maturities ranging from three to ten years. The largest of them is three-year bonds worth 2.03 billion som ($23.2 million) with a coupon of 12.86%: the auction for them was held on October 30, with the issue on November 2.
The remaining five issues are five-, seven- and ten-year securities worth from 500 million to 700 million som (from $5.7 million to $8 million), which will be issued from November 9 to 30. The coupon on them will range from 6% to 8%, although investors will have to wait longer for maturity.
The Kyrgyz Stock Exchange will hold two more placements worth 1.1 billion som ($12.6 million) on its own schedule. Both issues are for two years with a 5% coupon: securities worth 300 million som ($3.4 million) will be issued on November 16, and 800 million som ($9.1 million) on November 23, with auctions to be held on November 13 and 20 respectively.
A bet on classic instruments instead of experiments
STBs remain a proven way for the Ministry of Finance to borrow money, whereas the ministry's own crypto project did not take off: the authorities decided to shut down the USDKG stablecoin, whose sole shareholder was the Ministry of Finance. Along with it, the first state crypto exchange will be liquidated, and the issuing company had previously fallen under UK sanctions.
Sanctions risks are now also taken into account in the private market: the National Agency for Virtual Assets is preparing a unified digital platform for verifying crypto companies, their executives and owners. For businesses, this promises stricter screening when obtaining a license, and for users, fewer chances of entrusting money to a platform that ends up under restrictions.
The National Bank, through whose system the bulk of the November placements will pass, is simultaneously preparing a digital som, but the pilot with citizens and businesses has been postponed to 2027. The new form of money is supposed to enable automatic settlements for state orders and payments without the internet, but the timeline for a mass launch and the cost of the project are still unknown.
Cryptalist analysis: Kyrgyzstan is demonstrating a pragmatic pivot from crypto experiments to traditional debt financing: a yield of up to 12.86% on short-term securities makes STBs attractive to local investors, but the currency risk falls entirely on the holder. For the market, this is a signal of the maturity of domestic capital and the regulator's cautious attitude toward digital assets after the failure of USDKG.