Fitch upgrades KEGOC’s rating to BBB+ with stable outlook

English

Fitch Ratings has upgraded Kazakhstan Electricity Grid Operating Company's (KEGOC) long-term foreign currency Issuer Default Rating (IDR) to 'BBB+' from ‘BBB’. The outlook on the long-term IDRs revised to Stable from Positive.

The upgrade of KEGOC’s ratings reflects the upgrade of Kazakhstan’s long-term foreign and local currency IDRs to‘BBB+’ from ‘BBB’ and to ‘A-‘ from ‘BBB+’, respectively.

KEGOC's ratings are aligned with those of the Republic of Kazakhstan, due to its 100%-indirect-state-ownership, direct government guarantees for a large part of its debt (about 47% at the end of Q3 2012), and the strategic nature of Kazakhstan's national electricity transmission grid.

Support from the Samruk-Kazyna national welfare fund is considered a positive factor in implementation of KEGOC’s investment projects to develop the national electricity grid of Kazakhstan.

Fitch forecasts KEGOC to report positive operational cash flow in 2012-2015. The agency views KEGOC’s liquidity as adequate based on KEGOC’s balanced debt maturity profile. Enhancement of business or financial profile is considered one of the triggers which could potentially result in the positive KEGOC’s rating actions in future.

 FULL LIST OF RATING ACTIONS

Long-term IDR in foreign currency upgraded from ‘BBB’ to ‘BBB+’, stable outlook
Long-term IDR in national currency upgraded from ‘BBB+’ to ‘A-‘, stable outlook
Short-term IDR in foreign currency upgraded from ‘F3’ to ‘F2

 KEGOC is the System Operator of the Kazakhstan Unified Power System (UPS). The main objective is to secure reliable management of the national power grid (NPG). The company is the part of the Samruk-Kazyna national welfare fund. The company owns 24.5 thousand km of 110-1150 kV transmission lines and 74 substations with transformer installed capacity 34.5 MVA which form the NPG.