Currency Bonds of Freedom Holding Corp.

Bonds are debt securities that are traded on the stock exchange. At its core, a bond is like a receipt that confirms that someone took money from you and is obligated to pay it back with interest.

When you buy a bond, you are lending money to a specific company or even the government of an entire country. In return, the “borrower” undertakes to regularly pay you interest and return the entire investment amount after a predetermined period.

It is not entirely correct to compare bonds with stocks in a “better-worse” style. These instruments can complement one another in one investment portfolio.

The bond yield is on average lower than for stocks. Although, at the same time, it may be higher than bank deposit rates.

The risk of bonds is also traditionally lower: their price fluctuates less on the stock exchange. Plus, if the securities are held until the end of their term, an investor will receive back the entire amount of investment, even if the market price of the bonds falls by that time. Therefore, the bonds are considered a protective instrument. They are worth adding to an investment portfolio to increase its reliability, especially during tumultuous periods on the market.

The result of investing in bonds is more predictable because many factors can be found out from them, even before purchase: a circulation period, a fixed interest rate, profitability.

The issuer is the “debtor” who issued the bonds, in order to sell them and get paid for realization of its goals. The issuers can be companies, city authorities and country's governments.

The nominal value is the amount of debt per bond. If the nominal value is multiplied by the total number of bonds in the issue, it is possible to find out how much money the issuer is borrowing this time.

In other words, the nominal value is the initial price at which the issuer offers bonds to investors. On the Kazakhstani market, the nominal value of one security is most often KZT 1000. On foreign exchanges, the nominal value is $1000, although there are also bonds with the nominal value of $100,000. When bonds begin to be traded on the stock exchange, their price may fluctuate above or below their nominal value. But at the end of the term, the issuer returns money to the investor exactly at the nominal value of the bonds. 

The price of the bonds on the stock exchange is usually reflected as a percentage of the nominal value. When you see the figure of 95.3 in quotes, and the nominal value of the bond is KZT 1000, this means that the bond now costs 95.3% of KZT 1000. That is, 0.953*1000 = KZT 953. 

This is when the company has to settle with the bondholder and return the nominal value for each security. The maturity date is usually known in advance. On this day, the bonds disappear from your account and money appears instead. But you can also not wait for redemption and sell bonds at open auction, during stock exchange business hours.

These are regular interest payments that the investor receives from the issuer. In other words, this is the main source of your stable passive income from the bonds. The annual coupon rate is usually known immediately and is fixed for the entire period of circulation of the bonds. Although there is also a “floating coupon rate”. In most cases, the coupons are paid two or four times a year. Most often, companies pay them every three months.

This is how much you can earn on the bond as a percentage per annum. But don’t confuse the yield with coupons. If the coupon rate is fixed, then the yield may vary. It depends on the coupon rate, the market price of the bonds, the moment of purchase and ACI.

There is an important feature: when the price of a bond falls, its yield rises. And vice versa, when the price of the bond rises, the yield falls.

Freedom Finance SPC Ltd., incorporated as a special purpose company of the Astana International Financial Centre under the identification number 210540900127. Freedom Finance SPC Ltd. is a subsidiary of Freedom Holding Corp. (“FRHC”). The main activity of the FFSPC is raising funds through issuing and placing bonds for the sole purpose of financing loans in favor of the parent company Freedom Holding Corp.

Information on Shareholder

Freedom Holding Corp. is a corporation organized in the United States of America under the laws of the State of Nevada. The Company conducts financial activities, retail brokerage, investment consulting, securities trading, investment banking, underwriting, commercial banking and insurance services through its subsidiaries in Kazakhstan, USA, Uzbekistan, Kyrgyzstan, Armenia, Azerbaijan, Ukraine, UAE, Germany, UK and Cyprus, with representative offices in Greece, France, Spain and Poland.

The Chief Executive Officer of Freedom Holding Corp. is Timur Turlov. Mr. Turlov has more than 10 years of experience in various areas of the international securities industry.

Freedom Holding Corp. shares are traded on the Nasdaq Capital Market in the USA and the Kazakhstan Stock Exchange (KASE) in Kazakhstan. FRHC shares are included to the MSCI US Small Cap 1750 and MSCI US Investable Market 2500 indices.

FRHC specializes in providing access to the U.S. stock markets with IPOs being the most popular product among its clients. S&P Global Ratings assigned ratings to FRHC, brokerage companies in Kazakhstan and Cyprus and a bank in Kazakhstan (“B-”), Freedom Finance insurance and Freedom Finance Life (“B+”).

The 100% subsidiary of Freedom Holding Corp. in Cyprus – Freedom Finance Europe Ltd. is a direct member of Euroclear, allowing clients to benefit from a first-class exchange infrastructure at the leading international central securities depository.

The 100% subsidiary of Freedom Holding Corp. in Kazakhstan – Freedom Finance JSC has leading positions in brokerage service markets in Kazakhstan – No.1 by activity in corporate shares, bonds and REPO on KASE every year since 2017.

Freedom Finance SPC Ltd. Team

Board of Directors

Yevgeniy Ler

Chairman of the Board

Education: higher

from 2002 to 2006, Mr. Ler was employed by Deloitte & Touche where he held the position of senior auditor in the Financial Services & Industries Group, Audit

in 2006 joined BMB Munai and served in several capacities including finance manager and reporting manager before being appointed chief financial officer

Since November 2015 has served as the chief financial officer of Freedom Holding Corp.

Sergey Lukyanov

Member of the Board

Education: higher

From 2009 to 2016, he worked in senior positions at Finam Investment Holding. In October 2016, he was appointed head of the investment department of VTB 24, responsible for the development of the retail brokerage business

In March 2018, he took the post of Vice President of Otkritie Bank and was director of Otkritie Investments, where he oversaw the brokerage business

He is an independent director at the National Association of Stock Market Participants (NAUFOR) and a member of the Board of the Moscow Stock Exchange, as well as a member of the Financial Markets Commission at the Russian Union of Industrialists and Entrepreneurs

Madina Mantayeva

Member of the Board, Independent Director

Education: higher

In 1996 she graduated from the Kazakh State Academy of Management, specialty “Marketing and Commerce”, in 2008 she was awarded a Master’s degree in Business Administration, University of International BusinessБ

He has a diploma of additional (to higher) education from the Moscow International Higher School of Business "MIRBIS", a Master of Business Administration in Strategic Management and EntrepreneurshipБ

Practical experience since 1995, since 2000 - in senior positions in financial services companiesБ

Olga Baskakova

Chief Executive Officer

Olga Baskakova graduated from Kazakh State University of International Relations and Foreign Languages Ablay Khan in 2004 with a degree in international economics, Higher Law School Adalat in 2006 with a degree in international jurisprudence, Erickson Coaching International University in 2014 with a degree in coaching and Moscow Institute of Psychoanalysis in 2016 with a degree in psychoanalysis. She has vast experience as a senior legal counsel for more than 20 years, with management positions in Alina Group of Companies, DHL Logistics, Qazaq Air and other notable companies. From 2020 Olga is the Chief Legal Officer of Freedom Finance JSC and Freedom Finance Global PLC

Order on appointment of CEO

Decision on the appointment of a manager

Articles Freedom Finance SPC Ltd.

Certificate of Incorporation

Terms of the first tranche of bonds for US$200 million issued under the bond program

Terms of the third bond tranche totaling USD 200 million, issued under the bond program

Terms of the fourth bond tranche totaling EUR 87.935 million, issued under the bond program

Terms of the fifth bond tranche totaling CNY 219.07 million, issued under the bond program

Bond Program Prospectus