BMB Munai, Inc. Places US$60 Million in Convertible Bonds

BMB Munai has successfully completed the private placement of US$60 million in principal amount of five year convertible bonds to non-U.S. persons outside of the United States in accordance with Regulation S under the U.S. Securities Act of 1933, as amended and in compliance with the laws and regulations applicable in each country where the placement took place.

The Bonds carry a 5% coupon and have a yield to maturity of 6.25%. The Bonds will also be convertible into BMB Munai common shares. The initial conversion price was set at US$ 7.2094 per share, subject to adjustment in certain circumstances, including but not limited to, changes of control and certain future equity financings. The Bonds are callable after three years at a price equal to 104% of the principal amount thereof plus any accrued and unpaid interest to the date fixed for redemption, subject to the share price trading at least 30% above the conversion price. Holders of the Bonds will have the right to require BMB Munai to redeem all or a portion of their Bonds on July 13, 2010 at a price equal to 104% of the principal amount thereof plus any accrued and unpaid interest to the date fixed for redemption. Unless previously redeemed, converted or purchased and cancelled, the Bonds will be redeemed by BMB Munai at a price equal to 107.2% of the principal amount thereof on July 13, 2012. The Bonds constitute direct, unsubordinated and unsecured, interest-bearing obligations of BMB Munai.

The net proceeds from the issue will be used for further exploration and development of BMB Munai's oil and gas drilling and production activities in western Kazakhstan.

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