Moody's: Kazakhstan view to stable

Moody's Investors Service said it has moved the outlook on Kazakhstan's Baa2 sovereign rating to stable from negative.

This move follows growing evidence that the economic downturn is proving shallower than expected, Moody's said, and that the government's credit metrics will emerge relatively unscathed from the country's serious banking crisis.

The government has weathered the worst of the crisis in a way consistent with an investment-grade rating by protecting its creditworthiness, but forcing credit restructuring on to the country's banking system, the agency said.

The country's foreign-currency bond ceiling was lowered one notch to Baa2, the same level as the sovereign rating, while the foreign-currency bank deposit ceiling was maintained at Ba1, Moody's said. That alignment reflects a view that crisis management in Kazakhstan focuses primarily on protecting the government's balance sheet. It suggests that private debt issuers in foreign currency should seldom be rated higher than the sovereign, the agency said.

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