(The following statement was released by the rating agency)
Nov 14 -
Summary analysis -- Kazakhstan Temir Zholy ------------------------ 14-Nov-2012
CREDIT RATING: BBB-/Stable/-- Country: Kazakhstan
Primary SIC: Railroads
Credit Rating History:
Local currency Foreign currency
24-Dec-2010 BBB-/-- BBB-/--
03-Nov-2003 BB+/-- BB+/--
The rating on Kazakhstan's national railway operator Kazakhstan Temir Zholy (KTZ) reflects Standard & Poor's Ratings Services' opinion that there is a "very high" likelihood that the Republic of Kazakhstan (foreign and local currency BBB+/Stable/A-2; Kazakhstan national scale kzAAA/--/--) would provide timely and sufficient extraordinary support to KTZ in the event of financial distress. Our rating on KTZ is three notches above its stand-alone credit profile (SACP) of 'bb-'.
We consider KTZ to be a government-related entity (GRE). In accordance with our criteria for GREs, our view of a "very high" likelihood of extraordinary government support is based on our assessment of KTZ's:
-- "Very important" role in Kazakhstan's economy as a national railroad company. KTZ plays a key role in land-locked Kazakhstan's vital national transport sector; and
-- "Very strong" link with the Kazakh government, which fully owns KTZ indirectly via sovereign wealth fund Samruk-Kazyna (BBB+/Stable/A-2), and provides ongoing financial support and monitoring. We do not foresee any privatization risk in the near to medium term.