Development Bank of Kazakhstan Long-Term Ratings Raised To "BBB-"; Outlook Stable
21.05.04 14:46
/Standard & Poor's, London, May 20, 04/ - Standard & Poor's Ratings
Services said today it raised its long-term counterparty credit and senior
unsecured debt ratings on the Development Bank of Kazakhstan (DBK) to
"BBB-" from "BB+". The outlook is stable.
At the same time, Standard & Poor's raised its short-term counterparty
credit rating on DBK to "A-3" from "B".
The rating actions reflect the upgrade earlier today of Standard & Poor's
long-term foreign currency sovereign credit ratings on the Republic of
Kazakhstan to "BBB-" from "BB+", and of its local currency ratings to
"BBB/A-3" from "BBB-/A-3". The short-term foreign currency rating on
Kazakhstan was also raised to A-3. The outlook on Kazakhstan is stable.
"The ratings on DBK reflect the clearly defined and strategic public policy
role assigned to it by the government of Kazakhstan. DBK's 100% state
ownership also ensures it strong implicit government support," said
Standard & Poor's credit analyst Luc Marchand.
DBK is the primary vehicle in providing long-term credit to the nonextractive
sectors of the Kazakh economy, which is one of the main strategic
development targets of the government. The government maintains an
arm's-length relationship with DBK and does not guarantee the bank's
obligations, although it keeps the bank well capitalized relative to the size
of its business.
In 2004, the government renewed its support to the bank by increasing
DBK's capital to Kazakh tenge (KZT) 45.4 billion ($300 million), from
KZT37.7 billion in 2003, and granting DBK a 15-year budgetary loan of
KZT4.3 billion. The increase in DBK's capital is an integral part of the first
stage of the government's 2003-2015 strategic development program.
"Standard & Poor's expects that government support will remain strong, as
demonstrated by past capital increases and the expected further increase of
about $100 million in the bank's capital in 2005," said Mr Marchand.
No changes are expected in the policy and regulatory framework that would
weaken the bank's key policy role in the government's development plans
over the foreseeable future. Nevertheless, a deviation from DBK's policy
role, or signs of weakening government support, would result in downward
pressure on the ratings.
ANALYST E-MAIL ADDRESSES:
luc_marchand@standardandpoors.com
konrad_reuss@standardandpoors.com
SovereignLondon@standardandpoors.com
For detailed information apply:
Luc Marchand, London, 44 (207) 176-71-11
Konrad Reuss, London, 44 (207) 176-71-02
[2004-05-21]