(Reuters) – Kazakh state railway monopoly Kazakhstan Temir Zholy (KTZ) has issued an additional US $300 million in 30-year eurobonds, it said on Friday, as it seeks funds to pay for railway network expansion. The company foresees investment of more than $40 billion in its railway network by 2020.

The paper, maturing on July 10, 2042, was priced to pay an annual coupon of 5.55%, below the original yield guidance of 5.70%. It complements an $800 million issue launched last July.

Order books for the dollar-denominated paper, opened for investors on Thursday, were heavily oversubscribed, with bids from over 100 investors totalling around $2 billion, KTZ said. U.S. investors accounted for 40% of the bidders. “The issue drew significant interest from institutional investors, and the bond was placed along the lower threshold of the reduced price range,” the company said.

KTZ’s $800 million eurobond was massively oversubscribed, with bids worth a total of $5.2 billion, when launched on the London and Kazakhstan stock exchanges in July, the company said at the time. It bore an annual coupon of 6.95%.

Kazakhstan Temir Zholy Network

Kazakhstan has a great potential of to act as a transit in the trade between China, Europe, and even the eastern coast of America, as envisioned in the Trans-Asian Railway proposal. Current rail transport between China and Europe as part of the Eurasian Land Bridge goes over the Trans-Siberian railway, is lengthy, and requires bogie exchanges.

KTZ is engaging on the TransKazakhstaniTrunk Railways (TKTR), a major railroad project to link China and Southeast Asia to Europe for a length of 3,900 km. China and most of Europe use the standard rail gauge of 1,435 mm, and the TKTR will utilize the same gauge, avoiding costly delays at bogie exchange stations. The route to Europe will be shortened and laid out for high speed. It is estimated that it will be possible eventually to ship cargo in 7-10 days (half the current time by rail) from China’s ports to Europe. The sea transport takes about 40-65 days.

Last year, KTZ made a net profit of 123.2 billion tenge ($830 million).