Freedom Holding has arranged up to $1.16 billion in bond financing through a wholly owned subsidiary, with the proceeds earmarked for seven investment projects spanning data centers, artificial intelligence, telecommunications, media, urban technology and cross-border trade. The bonds are to be bought by Kokzhiyek Fund, an investment fund affiliated with Kazakhstan’s National Investment Holding Baiterek group.
The financing is debt, not an equity investment in Freedom Holding. Proceeds will be placed in escrow and released project by project, subject to approvals and safeguards; the full amount is not available to the company upfront.
Key details
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Bond terms: The US-dollar-denominated bonds will mature five years after issuance and pay 7.8% annual interest, in semiannual installments. They are to be listed on the Astana International Exchange.
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How funding will be released: The fund will deposit the purchase price into an escrow account at Freedom Bank Kazakhstan, a Freedom Holding subsidiary. Funds may be held in US dollars or Kazakh tenge and released in stages through December 30, 2028. The fund may extend that availability period at the issuer’s request.
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Unused funds: Any bond proceeds not released by the end of the availability period must be returned to the fund, with the corresponding bonds subject to mandatory early redemption.
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Permitted uses: Proceeds may finance the seven specified projects, including capital spending (and reimbursement of past capital spending), working capital, refinancing project-company debt and asset acquisitions. Spending outside the permitted purposes can trigger a default if not corrected within 60 days after notice, unless another cure period is agreed.
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Company co-funding: Freedom Holding, the bond issuer or the relevant project companies must contribute at least 10% of each project’s total cost. Across all projects, their contributions must total at least 20% of the bonds issued. Any project cost overruns or funding gaps caused by currency movements must also be covered by the company group, not the fund.
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Approval and project safeguards: Each project draw requires the fund’s consent and confirmation from an independent financial and technical controller, as well as project-specific conditions that include a guarantee from the relevant project company. The issuer may on-lend funds to project companies in different currencies at market rates; US-dollar loans cannot carry interest above the bonds’ 7.8% coupon.
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Guarantees and collateral: The bonds are guaranteed by Freedom Holding, subsidiary Freedom Kazakhstan Ltd. and CEO and board chairman Timur Turlov, who is also the company’s majority shareholder. As funding is released for each project, the fund is entitled to security over project assets, relevant revenue-contract claims, land and other fixed assets, and all of the equity in the project company. Each project company also guarantees obligations tied to its project, capped at the financing allocated to that project plus accrued interest.
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Financial and operating restrictions: Beginning with the fiscal year ending March 31, 2027, Freedom Holding must keep consolidated corporate debt at no more than 3.5 times equity and liquid assets at no less than 1.1 times corporate debt. The agreements also restrict additional borrowing, pledges and asset sales, and impose limits on dividends by the issuer and project companies and requirements for certain related-party transactions.
What changes
The agreement gives Freedom Holding access to a large, long-term funding facility for designated projects, but the money comes with a 7.8% interest cost and is released only as individual projects meet approval and security conditions. The company group must supply substantial co-funding and cover cost or currency shortfalls. The guarantees, collateral and financial covenants also create obligations extending beyond the issuing subsidiary, including a personal guarantee from Turlov.