S&P raises long-term local currency credit rating on Development Bank of Kazakhstan (DBK) to 'ВВВ', affirms 'ВВВ-' long-term foreign currency and 'A-3' short-term issuer credit ratings on DBK

/Standard & Poor's, London, June 16, 10/ - Standard & Poor's Ratings Services today said it had raised the long-term local currency rating on the Development Bank of Kazakhstan (DBK) to 'BBB' from 'BBB-'. At the same time, we affirmed the 'BBB-' long-term foreign currency and 'A-3' short-term issuer credit ratings on DBK. The rating action reflects our view of DBK's increased importance for and link to the Kazakh government (foreign currency BBB-/Stable/A-3; local currency BBB/Stable/A-3; Kazakhstan national scale kzAAA), and "almost certain" probability of extraordinary government support. In accordance with our criteria for government-related entities (see "Related Criteria And Research" below), our view of an "almost certain" likelihood of extraordinary government support implies the equalization of the issuer ratings to the ratings of the related government. The "almost certain" probability of extraordinary government support for DBK reflects our view of the bank's clearly defined and strategic public policy role and integral link to the government. The state's 100% ownership of DBK ensures strong implicit sovereign support. DBK is the primary vehicle for providing long- term credit to the non-extractive sectors of the Kazakh economy, and the expansion of these sectors is one of the government's main strategic development targets. With the beginning of the global financial crisis, DBK has also been assigned a key role in the support of project financing. Although the sovereign does not guarantee DBK's obligations, it keeps the bank well capitalized relative to the size of its business through sizeable budgetary transfers. The stable outlook reflects that on the Republic of Kazakhstan. DBK would be upgraded if the rating on the sovereign is raised. Likewise the outlook will mirror the outlook on the sovereign rating. We expect continued strong government support for DBK, as reflected by the government's long-term commitment to increase the bank's capital. In the foreseeable future we do not expect any changes in the policy and regulatory framework that would weaken the bank's key policy role in the government's development plans. A deviation from DBK's policy role, or signs of weakening government support, would result in downward pressure on the rating. For details, please, contact: Frank Gill, London, 44 (207) 176-71-29 Ivan Morozov, London, 44 (207) 176-71-59 E-mails of analysts: frank_gill@standardandpoors.com ivan_morozov@standardandpoors.com sovereignlondon@standardandpoors.com [2010-06-17]