Rail company Kazakhstan Temir Zholy assigned "kzAA-" Kazakhstan national scale rating - Standard & Poor's

/Standard & Poor's, Moscow, June 22, 05/ - Standard & Poor's Ratings Services said today it assigned its 'kzAA-' Kazakhstan national scale rating to rail company Kazakhstan Temir Zholy (KTZ). The 'BB+' global scale rating with a stable outlook on the company is unaffected. The ratings on KTZ reflect the poor and aged state of its operating assets, ongoing regulatory risk, the high level of expected capital expenditure, and the requirement for additional borrowing in the medium term. A further risk is the increasing contribution to KTZ's cash flows of oil traffic, much of which is expected to transfer to new pipelines. These risks are offset at this rating level by: KTZ's position as monopoly railroad infrastructure operator and dominant freight carrier; a strong intermodal competitive position; good medium-term rail traffic growth prospects; and KTZ's strategic importance to and support from the government of Kazakhstan (foreign currency BBB-/Stable/A-3; local currency BBB/Stable/A-3; Kazakhstan national scale kzAAA). Eugene Korovin, Moscow (7) 095-783-4090; eugene_korovin@standardandpoors.com Paul Lund, London (44) 20-7176-3715; paul_lund@standardandpoors.com InfrastructureEurope@standardandpoors.com [2005-06-23]