S&P puts Kazakhstan Temir Zholy on watch

Standard & Poor’s said it placed the BB long-term corporate credit rating on Kazakhstan Temir Zholy and its core subsidiary, JSC Kaztemirtrans, on CreditWatch with negative implications.

The agency also said it placed its kzA Kazakhstan national scale ratings on CreditWatch negative.

The negative watch is based on the fact that the company has not yet secured refinancing for its $350 million notes due May 11, S&P said.

The agency said it may lower the ratings by more than one notch if the company fails to refinance the debt over the coming weeks.

With less than one month remaining before the maturity date, the company’s ability to finalize the transaction is vulnerable to any further delays in its negotiations with creditors or delays for any other reason, S&P said.

The company’s stand-alone credit profile of B reflects the company’s strong market position in Kazakhstan and its exposure to commodity traffic volatility, the agency said.

The ratings also reflect its high leverage stemming from inflation of its foreign-currency debt and lower EBITDA generation, reflecting the fall in cargo transportation volumes, S&P said.

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