Kazakhstan plans to keep borrowing in China next year. Finance Minister Madi Takiyev said on October 14 that the 2027 republican budget will run a deficit of about 4.6 trillion tenge, to be covered by domestic and foreign borrowing. Given current market conditions, he said, the country could raise $1.5-2 billion abroad. "We are looking to China," he said.
Takiyev made the remarks while parliament debated the 2027-2029 budget bill and at a briefing afterwards. Reuters, Interfax-Kazakhstan, Kursiv and Kapital.kz all reported them the same day.
Which instruments
According to Interfax-Kazakhstan and Kursiv, the ministry is weighing two options: more panda bonds, meaning renminbi bonds sold by a foreign issuer inside China's domestic market, and, depending on conditions, dollar-denominated eurobonds. No size or timing has been given for either.
Why China
Takiyev pointed to this year's numbers. Kazakhstan raised roughly $1.5 billion in China at 1.82%, and servicing that debt costs the budget about 12.7 billion tenge a year. Borrowing the same amount at home, he said, would be far more expensive. The figures are as reported by Kursiv and Kapital.kz.
The "$1.5 billion" refers to two sovereign panda deals in 2026. The debut came on May 26: a three-year, RMB 3.4 billion bond with a 1.90% coupon. The order book was twice the issue size, and the bonds were listed on the Beijing Financial Assets Exchange and the Astana International Exchange (AIX). The second deal, priced on September 7, was larger at RMB 6.6 billion in two tranches: RMB 5 billion of three-year paper at 1.82% and RMB 1.6 billion of five-year paper at 1.95%. That brings the year's total to RMB 10 billion. One caveat: 1.82% is the coupon on the September three-year tranche, not the blended cost of both deals.
China International Capital Corporation (CICC) was lead underwriter on the second deal, with China Construction Bank, ICBC, the Export-Import Bank of China and Bank of China as joint lead underwriters. The bonds were sold in China's interbank market. Shortly before the deal, S&P raised Kazakhstan's sovereign rating from BBB- to BBB with a stable outlook.
Rules related to this news
How much debt
Takiyev told lawmakers that government debt stands at 38.5 trillion tenge, or 20.9% of GDP. External debt accounts for 8.4 trillion tenge, or 4.5% of GDP. The legal ceiling is 32% of GDP, which leaves some headroom.
What it means for Chinese business
For issuers: after the September deal the Finance Ministry said its three- and five-year bonds would serve as a pricing benchmark for future renminbi issues by Kazakh state-linked and corporate borrowers. AIX chief executive Assel Mukazhanova made a similar point, saying the sovereign deals open the Chinese capital market to Kazakh companies. Further sovereign issues in 2027 would fill out that renminbi yield curve.
For banks and companies: panda bonds are sold inside China, so the underwriters and buyers are Chinese institutions. Every lead and joint lead underwriter on the second deal was Chinese, with Kazakhstan's Teniz Capital acting as local manager. Chinese firms with renminbi revenue or costs in Kazakhstan may want to watch for new renminbi issues by Kazakh borrowers and their listings on AIX.
What is still open: the size of 2027 external borrowing and the split between panda bonds and eurobonds are only targets for now. Details will come once the budget is approved and the ministry publishes an issuance schedule. Pricing will depend on Chinese bond market conditions at the time, so this year's 1.82% should not be assumed for next year.
This article was prepared with AI assistance and checked against sources by an editor. The cover is an AI-generated illustration, not a photograph, and does not depict the events described.
Sources:
Kursiv, https://kz.kursiv.media/2026-10-14/svan-kazahstan-hochet-zanimat-milliardy-dollarov-v-kitae-blagodarya-vygodnoj-stavke/
Reuters (via The Moscow Times, Russian edition), https://ru.themoscowtimes.com/2026/10/14/kazakhstan-v-27g-mozhet-zanyat-na-vneshnikh-rynkakh-15-2-mlrd-na-pokrytie-defitsita-byudzheta-a208561
Interfax-Kazakhstan, https://pif.interfax.kz/en/news/83162
Kapital.kz (budget debate), https://kapital.kz/economic/154273/gosdolg-kazahstana-dostig-385-trln-tenge-minfin-obuyasnil-strategiyu-zaimstvovanij.html
Investfuture, https://investfuture.ru/articles/takiev-ocenil-gosdolg-kazahstana-v-20-9-vvp-6b040fc49930579c
AIX (debut issue), https://www.aixkz.com/ru/pages/news/view/kazakhstan-achieves-record-pricing-in-debut-panda-bond-issuance
Kapital.kz (debut issue, citing the Finance Ministry), https://kapital.kz/finance/148550/minfin-zanyal-na-rynke-kitaya-34-mlrd-yuanej.html
AIX (second issue), https://www.aixkz.com/en/pages/news/view/second-sovereign-panda-bond-listed-on-aix
Forbes.kz, https://forbes.kz/articles/minfin-kazahstana-razmestil-panda-obligatsii-na-66-mlrd-yuaney-303186
Kazinform (Chinese edition), https://cn.inform.kz/news/chengfaxingdierzhu-7f8b8b54/
Securities Times (stcn.com), https://stcn.com/article/detail/4176929.html
Key facts
- Kazakhstan’s 2027 budget deficit is approximately KZT 4.6 trillion and is expected to be covered through domestic and external borrowing.
- Kazakhstan can borrow approximately USD 1.5 billion to USD 2 billion externally in 2027, primarily from China.
- Kazakhstan’s Ministry of Finance is considering issuing additional panda bonds and may issue USD-denominated Eurobonds, depending on market conditions.
- Kazakhstan’s two sovereign panda bond issues this year totaled RMB 10 billion.
- Kazakhstan’s government debt accounts for 20.9% of GDP, with a cap of 32%.
- Kazakhstan’s sovereign panda bonds provide a pricing benchmark for quasi-state enterprises and companies issuing Renminbi bonds in China.
FAQ
How much does Kazakhstan plan to borrow externally in 2027?
The finance minister said that, based on external market conditions at the time, approximately USD 1.5 billion to USD 2 billion could be borrowed externally, primarily from China.
Will Kazakhstan continue to issue panda bonds?
Kazakhstan’s Ministry of Finance is considering issuing additional panda bonds and may also issue USD-denominated Eurobonds, depending on market conditions.
What are the sizes and interest rates of the two sovereign panda bond issues?
The first 3-year issue had a size of RMB 3.4 billion and a coupon rate of 1.90%. The second 3-year and 5-year issues had sizes of RMB 5 billion and RMB 1.6 billion, respectively, with interest rates of 1.82% and 1.95%.
What do sovereign panda bonds mean for Kazakh companies?
Kazakhstan said that the 3-year and 5-year sovereign issues could provide a pricing benchmark for the issuance of Renminbi bonds in China by the country’s quasi-state enterprises and companies.
Can the 1.82% interest rate be applied directly to 2027?
No, it cannot be applied directly. Panda bond interest rates depend on the level of interest rates in China’s bond market at the time. The 1.82% rate applies to the 3-year tranche of the second issue.