Fitch upgrades KazTransGas, subsidiaries

April 18, 2014

Fitch Ratings has upgraded KazTransGas JSC's (KTG) and its fully-owned subsidiaries, Intergas Central Asia JSC's (ICA) and KazTransGas Aimak JSC's (KTGA), Long-term Issuer Default Ratings (IDRs) to 'BBB-' from 'BB+'. The Outlook is Stable, Trend reported on April 17.

Short-Term IDR of KazTransGas JSC: upgraded to 'F3' from 'B';National Long-Term rating: upgraded to 'AA(kaz)' from 'AA-(kaz)', Outlook Stable; Senior unsecured long-term rating: upgraded to 'BBB-' from 'BB+'; Senior unsecured National long-term rating: upgraded to 'AA(kaz)' from 'AA-(kaz)'.

The upgrade of KTG and its subsidiaries (KTG or the group) reflects Fitch's reassessment of the group's linkage with its state-owned parent JSC National Company KazMunayGas (NC KMG, BBB/Stable), according to the Fitch report.

"We believe that the 'national operator' status granted to KTG in 2012, the ongoing transfer of trunk gas pipelines from the state to ICA, as well as NC KMG's flexible approach to KTG's dividend payouts underline stronger parent-subsidiary links between KTG and NC KMG than what was reflected in the previous ratings, " the report said.

The group's ratings are now notched down by one level from that of its parent, reflecting their close linkage, but also limited legal ties between the two. KTG qualifies as a material subsidiary in NC KMG's eurobond documentation and is subject to cross-default provisions, but NC KMG does not guarantee KTG's debt.

Copyright: Trend, 2014