Fitch places IDRs of seven Kazakhstan companies on rating watch negative
20.02.09 17:46
/Fitch Ratings, London/Moscow, February 19, 09/ - Fitch Ratings has today
placed the Long-term foreign currency Issuer Default Ratings (IDRs) of
seven Kazakh companies on Rating Watch Negative (RWN). The rating
action follows the placement of Kazakhstan's Long-term foreign and local
currency IDRs of 'BBB-' (BBB minus) and 'BBB', respectively, and Short-term
foreign currency IDR of 'F3' on RWN. A full breakdown of the rating actions
with respect to the seven companies is provided below.
The sovereign rating action reflects Fitch's concern that the authorities'
obligation to manage worsening problems in the banking system and broader
economy is likely to have an adverse impact on the sovereign's finances in
the relatively near-term.
The rating actions are as follows:
Kazakhstan Temir Zholy (KTZ)
Long-term foreign currency IDR 'BBB-' (BBB minus) placed on RWN
Senior unsecured rating of 'BBB-' (BBB minus) placed on RWN
KTZ's ratings are aligned with the sovereign's, given the 100% state-owned
railway company's strategic importance to Kazakhstan due to the country's
vast terrain, land-locked position and underdeveloped road infrastructure.
Kazakhstan Electricity Grid Operating Company (KEGOC)
Long-term foreign currency IDR 'BBB-' (BBB minus) placed on RWN
Long-term local currency IDR 'BBB' placed on RWN
Short-term foreign currency IDR 'F3' placed on RWN
KEGOC's ratings are aligned with the sovereign's given its 100% state
ownership and strong state support resulting from the strategic nature of
Kazakhstan's national transmission grid.
KazMunaiGaz National Company (NC KMG)
Long-term foreign currency IDR 'BBB-' (BBB minus) placed on RWN
Long-term local currency IDR 'BBB' placed on RWN
Short-term foreign currency IDR 'F3' placed on RWN
Senior unsecured rating of 'BBB-' (BBB minus) placed on RWN
NC KMG's ratings are aligned with the sovereign's given that it was
established as a wholly state-owned enterprise to represent the interests of
the government in Kazakhstan's oil and gas industry.
JSC KazMunaiGas Exploration Production (KMG EP)
Long-term foreign currency IDR of 'BBB-' (BBB minus) placed on RWN. (The
rating is constrained by Kazakhstan's sovereign rating.)
Long-term local currency IDR 'BBB-' (BBB minus) placed on RWN
Short-term foreign currency IDR 'F3' placed on RWN
JSC KazTransOil (KTO)
Long-term foreign currency IDR 'BBB-' (BBB minus) placed on RWN. (The
rating is constrained by Kazakhstan's sovereign rating.)
Short-term foreign currency IDR 'F3' placed on RWN
Fitch rates NC KMG's subsidiaries (including KMG EP and JSC KazTransOil)
primarily on a standalone basis, albeit with implicit state support via NC KMG
being incorporated into the ratings, as well as their inter-dependencies. Fitch
believes that the current solid financial profile of KMG EP underpinned by
strong profitability, its low debt level, ample cash position and moderate
capex programme will provide a cushion against the cyclical downturn in the
global oil and gas markets and the worldwide economic slowdown.
Nevertheless, the ultimate state ownership of KMG EP and its reliance on
Kazakh banks for large cash deposits make the company more vulnerable to
any potential government actions directed to support the weakening
economy through state-owned enterprises, especially in the event of a
significant deterioration of the Kazakh economy.
The ratings of other NC KMG's subsidiaries - KazTransGas and JSC
Intergas Central Asia - are unaffected. They are as follows.
KazTransGas:
Long-term foreign currency IDR: 'BB'; Outlook Stable
Short-term foreign currency IDR: 'B'
Long-term local currency IDR: 'BB'; Outlook Stable
JSC Intergas Central Asia:
Long-term foreign currency IDR: 'BB+'; Outlook Stable
Short-term foreign currency IDR: 'B'
Long-term local currency IDR: 'BB+'; Outlook Stable
Senior unsecured rating: 'BB+'
JSC National Atomic Company Kazatomprom (Kazatomprom)
Long-term foreign currency IDR of 'BBB-' (BBB minus) placed on RWN. (The
rating is constrained by Kazakhstan's sovereign rating.)
Short-term foreign currency IDR 'F3' placed on RWN
Kazatomprom is a 100% state-owned uranium operator. Kazatomprom's
ratings reflect the company's leading position in the world uranium market, its
strategic importance to Kazakhstan and its relatively strong financial profile.
Mangistau Electricity Distribution Network Company (MEDNC)
Long-term foreign currency IDR 'BB' placed on RWN
Foreign currency senior unsecured rating of 'BB' placed on RWN
Short-term foreign currency IDR affirmed at 'B'
Long-term local currency IDR assigned at 'BB+' and placed on RWN
Local currency senior unsecured rating of 'BB+' placed on RWN
National Long-term Rating of 'AA-(kaz)' (AA minus) placed on RWN
MEDNC's ratings are linked to the sovereign's, but notched down to reflect
that little indication has been given by MEDNC's ultimate parent, Samruk,
that it will provide timely financial assistance in case of financial distress.
The company has a near-monopoly position in electricity transmission and
distribution in Mangistau, one of Kazakhstan's strategic oil and gas regions.
Fitch's 19 February 2009 commentary on Kazakhstan's sovereign ratings is
available on the agency's public website, www.fitchratings.com
Contacts:
Angelina Valavina, London, Tel: +44 (0) 207 682 7383
Josef Pospisil: +44 (0) 207 682 7339
Nikolai Lukashevich, Moscow, Tel: +7 495 956 9901
Media contact:
Alexei Mironov, Moscow, Tel.: + 7 495 956 9901/9908,
alexei.mironov@fitchratings.com;
Marina Moshkina, Moscow, Tel.: + 7 495 956 6904/9901,
marina.moshkina@fitchratings.com
[2009-02-20]