S&P places four Kazakhstan companies on CreditWatch with negative outlook on weakened bank system and possible reduced government support

/Standard & Poor's, Moscow, June 16, 09, heading by KASE/ - Standard & Poor's Ratings Services said today that it had taken the following specific rating actions: - The 'BB+' long-term corporate credit, 'B' short-term corporate credit, and kzAA-' Kazakhstan national scale ratings on Kazakh Agrarian Credit Corp. (KACC), and issue ratings on KACC's bonds and loan, were placed on CreditWatch with negative implications; - The 'BB' long-term corporate credit and 'kzA+' Kazakhstan national scale ratings on Kazpost (JSC) were placed on CreditWatch with negative implications; - The 'BB' long-term corporate credit and 'kzA' Kazakhstan national scale ratings on Mortgage Guarantee Fund of Kazakhstan (JSC) (MGFK) were placed on CreditWatch with negative implications; - The 'BB' long-term corporate credit, 'B' short-term corporate credit, and 'kzA' Kazakhstan national scale ratings on KazAgroGarant were placed on CreditWatch with negative implications. "The CreditWatch placement reflects our concern that Kazakh GREs are vulnerable to the country's weakened banking system and government efforts to stabilize it," said Standard & Poor's credit analyst Boris Kopeykin. Although we have no evidence so far of any additional restrictions in asset and cash management imposed on the four GREs other than standard requirements of their parent entities, Samruk and KazAgro holding companies, we believe that the government's desire to stabilize the banking system poses a potential risk to GREs because they may have reduced access to their deposits with suffering Kazakh banks. In addition, deteriorating liquidity and lower safety of cash reserves and investments pressure the GREs' stand-alone credit quality. That said, we still believe that the Kazakh government has both the incentive and the ability to support these GREs, if necessary. "Standard & Poor's plans to review the CreditWatch placement on KACC, Kazpost, MGFK, and KazAgroGarant after we have finalized our assessment of potential government support to Kazakh GREs, and also the effects of the continued financial system turmoil on the stand-alone credit quality of these GREs," said Mr. Kopeykin. In the case of KACC, which has rating loan acceleration triggers in its $136 million bank loan agreement, resolution of the CreditWatch placement would also require more clarity regarding the future creditor's decisions on acceleration, and/or re- iteration of availability of full and timely extraordinary support from KazAgro and the Kazakh government. Rating list To From Kazakhstan Agrarian Credit Corporation (KACC) ВВ+/Watch Negative/В ВВ+/Stable/В kzAA-/Watch Negative kzAA- Kazpost BB/Watch Negative/- ВВ/Stable/- kzA+/Watch Negative kzA+ Mortgage Guarantee Fund of Kazakhstan BB/Watch Negative/- ВВ/Stable/- kzA/Watch Negative kzA KazAgroGarant BB/Watch Negative/В ВВ/Stable/В kzA/Watch Negative kzA NB: The list does not include all ratings affected. For further information, please, contact: Boris Kopeykin, Moscow, 7 (495) 783-40-62 Ben Faulks, London, 44 (207) 176-71-08 Annette Ess, Frnakfurt, 49 (693) 399-91-57 Victor Nikolskiy, Moscow, 7 (495) 783-40-10 E-mails of analysts: boris_kopeykin@standardandpoors.com ben_faulks@standardandpoors.com annette_ess@standardandpoors.com victor_nikolskiy@standardandpoors.com PublicFinanceEurope@standardandpoors.com [2009-06-17]