S&P; affirms Kazakh KazMunaiGas at 'BBB-/kzAA'

April 23, 2014

Standard & Poor's Ratings Services affirmed its 'BBB-' long-term corporate credit rating on Kazakhstan's National Oil And Gas Company KazMunaiGas (KMG), the rating agency reported on April 22, said Trend. The outlook is stable.

"The affirmation reflects our unchanged assessments of KMG's stand-alone credit profile (SACP) at 'b+' and the likelihood of extraordinary government support as "extremely high." KMG's financial risk profile has been improving, and we now assess it as "aggressive," from "highly leveraged" previously," S&P said.

Still, the agency thinks that KMG's future financial performance is subject to uncertainties, such as the commissioning of the Kashagan field and the return on KMG's investments in refinery modernization. These uncertainties cannot be reliably captured in base case. Therefore, S&P now assigns a "negative" financial policy modifier of minus one notch. The agency believes that at 'b+', KMG's SACP assessment compares well with those of other entities and, therefore, the comparable ratings analysis is "neutral."

The stable outlook reflects the expectation that KMG will continue to benefit from an "extremely high" likelihood of extraordinary government support. It also reflects the stable outlook on the sovereign.

Copyright: Trend, 2014