S&P affirmed its 'BB' credit rating on Kaztransgas

/REUTERS, London, November 7, 03/ - International rating agency Standard & Poor's Ratings Services affirmed 'BB' long-term issuer credit rating on Kazakhstan-based gas pipeline operator Intergas Central Asia (ICA) and its holding company KazTransGas (KTG). The outlook is stable. Below is an original version of the announcement: LONDON, Nov 7 - Standard & Poor's Ratings Services said today it affirmed its BB' long-term issuer credit rating on Kazakhstan-based gas pipeline operator Intergas Central Asia (ICA) and its holding company KazTransGas (KTG) following a review. The outlook is stable. The ratings on ICA and KTG reflect: The risk to cash flows resulting from their heavy dependence on the companies' major counterparty, the Russian gas monopoly OAO Gazprom (B+/Positive/--) and its affiliate trading companies; the group's lack of operating diversity; significant counterparty exposure to the gas exporting countries Turkmenistan and Uzbekistan and end markets, including Ukraine (B/Positive/B); and the potential for additional capital expenditure to upgrade and expand the network. These risks are offset at this rating level by ICA's monopoly position as the gas transport facility between central Asian gas exporters and the main European gas market, its strategic importance to the Republic of Kazakhstan (foreign currency BB+/Stable/B; local currency BBB-/Stable/A-3), and 100% ownership by the state- owned, strategically important KazMunaiGas (KMG) group. "The stable outlook reflects Standard & Poor's expectation that KTG and ICAs' operating and financial performance will continue to improve as a result of an increase in the volume of transmitted gas and the supportive pricing policy of their business partners," said Standard & Poor's Infrastructure Finance credit analyst Mikhail Galkin. "The concession agreement is expected to be exchanged for full ownership in the medium term, strengthening KTG and ICAs' credit profiles by eliminating concession termination risk and improving operational transparency. The expected merger of KTG and ICA should also improve the group's transparency." [2003-11-07]