Moody's rates Halyk Bank notes Baa2

Moody's Investors Service said it assigned a long-term Baa2 rating to the senior unsecured foreign-currency notes expected to be issued by HSBK (Europe) BV, a special-purpose company wholly owned by Kazakhstan-based JSC Halyk Bank. The outlook is stable.

The issue will be unconditionally and irrevocably guaranteed by Halyk Bank, which is the ultimate obligor under the transaction. The amount will be determined by market conditions, and the tenor is likely to be in the range of seven to ten years.

Halyk Bank's senior unsecured debt rating has pierced Kazakhstan's Baa3 sovereign ceiling for bonds, Moody's said, based on the bank's intrinsic financial strength, its 12.4% market share in term of banking assets and potential support from the Kazakhstani authorities in the event of need given the vital role the bank plays in the country's economy.

The agency said the rating also reflects the probability of a sovereign default implied by the Kazakhstan government's low investment-grade Baa3 foreign-currency bond rating and the likelihood that the government could impose a debt moratorium in the event of default on its own foreign currency obligations.

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