Fitch Affirms KazTransOil at BBB-, outlook Stable

/IRBIS, October 14, 2010/ - Fitch Ratings affirmed the ratings of the Kazakh Company KazTransOil ("WHO"): Long-term Issuer Default Rating (IDR) in foreign currency at "BBB-" and short-term foreign currency IDR "F3 "stated in the report published today by Fitch. The outlook on the long-term issuer default rating - "Stable". As stated, the ratings reflect the WHO monopoly companies in the sector of transportation of oil in Kazakhstan, whose economy depends on the development of the petroleum industry. Fitch believes that someone has a good position to take advantage of expected growth of oil production in Kazakhstan in the medium term. In addition, the ratings incorporate a relatively stable business structure MSW, a favorable moment for which a diversified customer base and the fact that over 80% of the volume of oil transportation company in 2009 was carried out on long-term contracts. In addition, the ratings also take into account the strong credit metrics of the company. So, in 2009, adjusted debt to funds from operations (FFO) was 0.5 x, and EBITDAR margin was 50%. For these parameters the group looks favorably in comparison with comparable pipeline operators in Kazakhstan and the world. Fitch expects that someone will continue to generate strong cash flow and will continue to have positive free cash flow in 2010-2011, which will contribute to higher tariffs for transporting oil for export in 2010 and expected growth in transport volumes in the future. Financial performance of WHO also supported by low absolute level of debt the company - both general and short-term. At the end of the first half of 2010 short-term debt of the company amounted to only KZT2.2 million (0.015 million). Fitch considers the entire debt of the joint venture of the Kazakhstan-China Pipeline (SP CCV "equal shares in which belong to the WHO and its subsidiaries China National Petroleum Corporation (" CNPC ")) as having no recourse to the WHO, despite the expiry of the guarantees provided by the CNPC two Eurobond issues, hosted this joint venture. According to Kazakh law regression to the WHO for the joint venture CCV is strictly limited contribution to the WHO Capital of the JV. In addition, the rapid increase of oil transportation in 2008-2009. And the expected growth over the next five years to maintain a significant cash flow generation in the joint venture CCV and, consequently, its ability to service debt. In his financial analysis, WHO Fitch continues to pay more attention to ratios based on the total leverage, rather than net-data, since much of the company's cash position is located in the Kazakh banks. For Kazakhstan's banking system has been adversely affected by global financial and economic crisis, although there were already some signs of stabilization. Fitch's rating WHO as a separate structure taken as legal, operational and strategic ties between the parent company (National Company KazMunaiGaz; "BBB-"/forecast "Stable") and its 100 per cent subsidiary (CTO) are limited in accordance with the methodology, Fitch "The relationship between ratings of parent and subsidiary companies." [2010-10-14]