Fitch Ratings changes Astana Finance's FC IDR outlook to "Negative", affirms at "BB+"
19.12.07 15:57
/Fitch Ratings, London/Moscow, December 18, 07/ - Fitch Ratings has
today affirmed Kazakhstan-based Astana Finance's (AF) Long-term foreign
currency Issuer Default rating (IDR) at 'BB+' but revised the Outlook to
Negative from Stable. The agency has also affirmed AF's ratings at Long-
term local currency IDR 'BB+', senior unsecured debt 'BB+', Short-term
foreign currency IDR 'B', National Long-term 'A+(kaz)', Individual 'D/E',
Support '3' and Support Rating Floor 'BB+'. The Outlooks for the Long-term
local currency IDR and National Long-term rating are Stable.
The rating action follows yesterday's rating action in respect of the Republic
of Kazakhstan's sovereign ratings, when the Outlooks for Kazakhstan's
Long-term foreign currency IDR ('BBB') and Long-term local currency IDR
('BBB+') were revised to Negative from Stable. AF's Long-term IDRs and
senior debt ratings ultimately reflect the moderate potential for support from
the Kazakhstan authorities in the event of need. The Outlooks for AF's Long-
term local currency IDR (currently three notches below the Kazakhstan
sovereign Long-term local currency IDR whereas the Long-term foreign
currency IDR is two notches lower) and National rating remain Stable to
reflect the anticipated change in AF's 25% shareholder, which is expected to
be finalised in Q108.
AF is currently 25%-owned by the municipality of Astana (rated Long-term
foreign currency and local currency IDRs 'BBB-' (BBB minus)/ Outlook
Stable). In Q108, the municipality's stake is to be transferred to the state-
owned Kazyna Fund for Sustainable Development (Kazyna), which owns
various development organisations in Kazakhstan, including the
Development Bank of Kazakhstan (rated Long-term foreign currency IDR
BBB'/Outlook Negative). The transfer will take place, along with an injection
of KZT25bn of new equity, in Q108. When it takes over the municipality of
Astana's stake, Kazyna will issue a comfort letter in respect of AF's
obligations that is similar to existing, strongly worded letters from the
Municipality of Astana.
AF's Individual 'D/E' rating reflects its rapid growth, substantial
concentrations and very high leverage. Its leverage profile will improve
significantly, once it receives the KZT25bn of new equity capital to
accompany the shareholder change in Q108.
Near-term liquidity is satisfactory. AF relies on the positive structural
mismatch of its balance sheet. AF's predominantly long-term funding is
sourced mainly from the local and international debt capital markets and
banks. As for other financial institutions in the region, the willingness of the
international capital markets to take Kazakhstani financial institution risk
contracted sharply in H207, but AF has relatively limited debt and loan
repayments before Q109.
AF was created in 1997 by the Municipality of Astana to facilitate
development finance (loans, leasing and equity) for Astana, the capital of
Kazakhstan, and for the surrounding Akmola region. It has since diversified
geographically and into certain aspects of investment banking
Contacts:
James Longsdon, London, tel.: +44 20 7417 4309
Contacts for mass media:
Alla Izmaylova, Moscow, tel.: + 7 495 956 9901/9903,
alla.izmailova@fitchratings.com
[2007-12-19]