How Kyrgyzstan consolidates its access to global capital markets through bonds and digital assets

The Kyrgyz Republic, strategically located in Central Asia, is transforming its financing strategy through a dual approach: sovereign bond issuances and the introduction of digital assets backed by gold. This initiative marks a turning point in the country’s financial positioning in international markets.

Successful Eurobond debut: $700 million raised

In May, the Kyrgyz government completed its first access to international bond markets, achieving a placement of $700 million. This eurobond, maturing in 2030, generated demand exceeding $2.1 billion, demonstrating significant interest among institutional investors.

Although S&P Global Ratings assigned a speculative grade to the instrument (four levels below investment grade), market response was robust. European investors took the majority of the allocation: Europe received 45% of the offering, while the United Kingdom and Ireland took the remaining 30%. This geographic distribution reflects diversified international confidence in Kyrgyz creditworthiness.

Credit expansion: Eldik Bank and corporate entities in perspective

The success of the sovereign issuance has opened doors for the local financial sector. Eldik Bank Open Joint Stock Company, fully state-owned, is finalizing preparations to launch its own bond issuance, expected in February. The bank has contacted organizers and is reviewing financing projects worth over $1.5 billion, primarily in the energy sector.

This move represents the first international bond issuance by a Kyrgyz banking entity. Financial authorities indicated that other state-linked institutions are also exploring similar issuances, supported by the credibility gained from the sovereign success.

Solid economic fundamentals underpin the borrowing strategy

The government has structured its entry into capital markets based on favorable economic prospects. Kyrgyzstan’s debt-to-GDP ratio currently stands at 42.7%, with a projected significant reduction to 23% by the end of 2030, driven by economic growth and amortization of existing commitments.

This macroeconomic strengthening was key in the issuance decision. Finance Ministry officials emphasized that borrowing remains within approved limits, and the eurobond issuance mandate amounts to $1.7 billion in multiple currencies. Future placements will depend on external conditions and market appetite, maintaining flexibility in the strategy.

Alternative instruments such as green bonds and Islamic finance products are also being evaluated, although authorities indicated that these structures require longer preparation than traditional issuances.

The digital side: USDKG, the gold-backed stablecoin

Complementing its borrowing strategy, Kyrgyzstan advanced in November with the launch of USDKG, a gold-backed stablecoin linked to the US dollar. The initial issuance reached $50 million, distributed across the Tron and Ethereum blockchains.

Gold backing comes from the Ministry of Finance, which coordinates acquisitions with the central bank. Promoters described USDKG as a cross-border transaction tool aimed at facilitating regional economic activity. Authorities suggested potential interest in future market quotations to expand the token’s utility.

Convergence of traditional and digital financing

Kyrgyzstan’s strategy integrates sovereign bonds, corporate access to global markets, and digital assets within a coordinated framework. This approach reflects coherent policy decisions aimed at diversifying financing channels and strengthening access to international capital.

Proceeds from the eurobond issuance were allocated to Eldik Bank to capitalize on strategic project financing operations. The combination of traditional debt and digital instruments positions Kyrgyzstan as a multifaceted issuer in global financial markets, attracting investors with diverse profiles.