Moody’s rates Development Bank of Kazakhstan debt Baa3, Ba1

Moody's Investors Service said it assigned Baa3 local currency issuer rating to the Development Bank of Kazakhstan (DBK) at the same level as existing foreign currency issuer rating.

Concurrently, the agency assigned provisional Baa3/provisional Prime-3 long and short-term local-currency senior debt ratings, and a provisional Ba1 long-term local-currency subordinated debt rating to the KZT 100 billion bond program.

The rating on the local-currency senior unsecured debt is at the same level as DBK's long-term issuer ratings, while the subordinated debt is rated one notch lower than the bank's Baa3 long-term issuer ratings.

The agency also assigned Baa3 long-term local-currency debt rating to the 10-year KZT 20 billion senior unsecured bonds to be issued under the program.

The outlook on the long-term ratings is stable.

Moody's rating action is primarily based on DBK's program and issue prospectuses and unaudited financial statement as at Q3 2014 prepared in accordance with IFRS.

In assigning these ratings, Moody's said it considered: (a) DBK's standalone creditworthiness; (b) the Baa2 long-term issuer rating of Kazakhstan; (c) very high correlation between default of the issuer and default of the government; and (d) the assessment of a high probability of systemic support.

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