Freedom Holding Lines Up Up To $1.16 Billion Bond Deal With Fund Tied To Kazakhstan's Baiterek
The five-year, 7.8% bonds would fund seven data center, AI and telecom projects, with CEO Timur Turlov among the guarantors.
Freedom Holding, the Kazakhstan-focused financial group, agreed on October 23 to sell up to $1.16 billion of five-year dollar bonds to Kokzhiyek Fund, an investment fund that sits inside the Baiterek state holding group, the company disclosed Thursday in an 8-K. The money would pay for seven projects spanning data centers, an artificial intelligence supercluster and telecom.
Terms of the 7.8% bonds
The bonds are to be issued by FRHC-IF.SPC Ltd., a wholly owned special purpose subsidiary based in the Astana International Financial Centre, and listed on the Astana International Exchange. They mature five years after issuance and pay 7.8% a year, semi-annually.
The issuer can redeem them early, in whole or in part, after the first anniversary of the Fund's purchase, with at least 180 days' written notice. The Fund is managed by Qazaqstan Investment Capital Management and is part of the Baiterek group through Qazaqstan Investment Corporation.
If the issuer misses a coupon for 90 days between the second and fourth anniversaries of the first purchase, the Fund can require Freedom Holding to issue common stock to cover the unpaid interest, not principal. The share price used would be 85% of the 180-day volume-weighted average, subject to limits meant to preserve the company's existing control and to regulatory approvals.
Escrow, projects and guarantees
The Fund pays into an escrow account at Freedom Bank Kazakhstan, a company subsidiary. Money is released project by project through December 30, 2028, which the Fund may extend. Each release needs the Fund's consent and sign-off from an independent financial and technical controller; bonds tied to undisbursed money must be redeemed.
The projects cover data centers, an AI supercluster, telecommunications infrastructure, media, urban technology and cross-border trade. Proceeds may fund capital spending, working capital, refinancing of project-company debt and asset purchases.
The issuer, the company or project companies must put in at least 10% of each project's cost, and at least 20% of the bonds' principal across all projects. Cost overruns and currency shortfalls fall on them, not the Fund.
Turlov's personal guarantee
The bonds are guaranteed by Freedom Holding, its subsidiary Freedom Kazakhstan Ltd. and Timur Turlov, the company's chief executive, board chairman and majority shareholder. As money is released, the Fund also gets pledges over project assets, land and revenue contracts, a pledge of 100% of each project company's equity, and a guarantee from each project company.
From the fiscal year ending March 31, 2027, the company must keep corporate debt at no more than 3.5 times equity and liquid assets at no less than 1.1 times corporate debt, measured annually on a consolidated basis.
Default triggers include Turlov ceasing to be a stockholder without the Fund's consent, or the company, issuer, a project company or Turlov landing on a sanctions list. On default the Fund can demand redemption within ten days.
Freedom Holding runs brokerage, banking and insurance businesses, plus payments, e-commerce and early-stage telecom and media units, mainly in Kazakhstan. As of March 31, 2026, it had about 5.0 million banking customers and 858,000 retail brokerage accounts.
Freedom Holding plans to file the investment and guarantee agreements, with some confidential information redacted, as exhibits to its 10-Q for the quarter ending December 31, 2026.
Sources
- 8-K Filing — Freedom Holding Corp. (FRHC) — SEC EDGAR
