S&P REVISED RATINGS OF KAZAKHSTAN COMPANIES, CONNECTED WITH THE GOVERNMENT DUE TO THE CHANGE OF FORECAST OF KAZAKHSTAN COMPANIES RATINGS TO "NEGATIVE"

/Standard & Poor's, Moscow, April 29, 08/ - Standard & Poor's Ratings Services said today that it revised its outlook to negative from stable on several sovereign and corporate government-related entities (GREs) and their subsidiaries: Kazakhstan Electricity Grid Operating Co. (JSC) (KEGOC); JSC NC KazMunayGas (KMG) and subsidiary JSC KazMunaiGas Exploration Production (KMG EP), along with KMG subsidiary KazTransGas (KTG); Development Bank of Kazakhstan (DBK); Kazakh Agrarian Credit Corp. (KACC); Mortgage Guarantee Fund of Kazakhstan (JSC) (MGFK); and Kazpost (JSC). We also revised the outlook on KMG subsidiary KazTransOil (KTO) to stable from positive. At the same time, we lowered the Kazakhstan national scale ratings on KACC to 'kzAA-' from 'kzAA', on MGFK to 'kzA' from 'kzA+', and on Kazpost to 'kzA+' from kzAA-'. We also affirmed the 'BB+' long-term issuer credit and 'kzAA-' Kazakhstan national scale ratings on Kazakstan Temir Zholy and its subsidiary JSC Kaztemirtrans. See the ratings list below for the entities affected. The rating actions followed the revision of the outlook to negative from stable on the Republic of Kazakhstan (foreign currency BBB-/Negative/A-3; local currency BBB/Negative/A-3; Kazakhstan national scale rating 'kzAAA'). KMG, KEGOC, DBK, KACC, MGFC and Kazpost, are 100% government- owned entities, with public policy-based mandates from the state. We therefore apply our GRE criteria to rate these entities. For all these entities, we use a top-down rating approach with relation to the state, reflecting their public-policy mandate and the strong likelihood that they will receive extraordinary government support in case of financial distress. This results in a higher rating than the entities' stand-alone credit quality warrants. The outlook revisions on the above entities reflect our expectation that the ratings will move in line with the sovereign ratings. The negative outlooks on these entities reflect the negative outlook on the sovereign, as well as our continued expectation that they would receive extraordinary support from the Republic of Kazakhstan in case of financial distress. The ratings and outlook on KMG's subsidiaries KMG EP and KTG are linked to that of the parent and will likely remain one and two notches, respectively, below the rating on the parent. The outlook revision on KazTransOil to stable from positive highlights the limited potential ratings upside, given the negative outlook on the rating on parent KMG. But the 'BB+' stand-alone credit quality of KTO offers some protection against ratings downside. The affirmation of the rating on KTZ reflects our assessment of the railway operator's stand-alone credit quality at 'BB+'. A negative change in the sovereign rating will therefore not automatically trigger a negative rating action on KTZ. The rating on KTZ's subsidiary JSC Kaztemirtrans will continue to be pegged to the rating and outlook on its parent, KTZ. RATINGS LIST ------------------------------------------------------- To From -------------------------------------- --------------- Kazakhstan Electricity Grid Operating Co. (JSC) Corporate credit rating BB+/Negative/- BB+/Stable/- -------------------------------------- --------------- JSC NC KazMunayGas Corporate credit rating BBB-/Negative/- BBB-/Stable/- Kazakhstan national scale rating kzAA kzAA -------------------------------------- --------------- JSC KazMunaiGas Exploration Production Corporate credit rating BB+/Negative/- BB+/Stable/- -------------------------------------- --------------- KazTransGas Corporate credit rating ВВ/Negative/- ВВ/Stable/- -------------------------------------- --------------- Development Bank of Kazakhstan Issuer credit rating ВВB-/Negative/A-3 ВВB-/Stable/A-3 -------------------------------------- --------------- Kazakh Agrarian Credit Corp. Issuer credit rating BB+/Negative/B BB+/Stable/B Kazakhstan national scale rating kzAA- kzAA -------------------------------------- --------------- Mortgage Guarantee Fund of Kazakhstan (JSC) Issuer credit rating ВВ/Negative/- ВВ/Stable/- Kazakhstan national scale rating kzA kzA+ -------------------------------------- --------------- Kazpost (JSC) Issuer credit rating ВВ/Negative/- ВВ/Stable/- Kazakhstan national scale rating kzA+ kzAA- -------------------------------------- --------------- KazTransOil Corporate credit rating BB+/Stable/- BB+/Positive/- -------------------------------------- --------------- Kazakhstan Temir Zholy Corporate credit rating BB+/Stable/- BB+/Stable/- Kazakhstan national scale rating kzAA- kzAA- -------------------------------------- --------------- JSC Kaztemirtrans Corporate credit rating BB+/Stable/- BB+/Stable/- Kazakhstan national scale rating kzAA- kzAA- ------------------------------------------------------- NB: This list does not include all ratings affected. Primary Credit Analysts: Elena Anankina, Moscow, 7 (495) 783-41-30 Eugene Korovin, Moscow, 7 (495) 783-40-90 Ben Faulks, London, 44 (207) 176-71-08 Felix Ejgel, Moscow, 7 (495) 783-40-60 Boris Kopeykin, Moscow, 7 (495) 783-40-62 Secondary Credit Analysts: Sergei Gorin, Moscow, 7 (495) 783-41-32 Lidia Polakovic, London, 44 (207) 176-39-85 Analysts e-mails: Elena_Anankina@standardandpoors.com eugene_korovin@standardandpoors.com ben_faulks@standardandpoors.com felix_ejgel@standardandpoors.com boris_kopeykin@standardandpoors.com sergei_gorin@standardandpoors.com lidia_polakovic@standardandpoors.com [2008-04-30]