Fitch cuts Kazanorgsintez notes to CCC-

Fitch Ratings said it downgraded OJSC Kazanorgsintez's long-term issuer default rating to CCC from B- following the agency's review of the company's interim results. Fitch also said it downgraded the senior unsecured debt rating its $200 million loan participating notes to CCC- from B- and assigned a recovery rating of five to reflect below-average recovery prospects in the event of a default. The short-term issuer default rating was downgraded to C from B and removed from rating watch negative, and the long-term issuer default rating and the senior unsecured rating remain on rating watch negative.

The downgrade reflects concerns over the material deterioration in the company's credit profile in the first half of 2008 with no uplift expected in the second half as demand and prices soften in the polyethylene market, Fitch said.

Fitch said the lower earnings and higher debt in 2008 will translate into a gross debt-to-EBITDA ratio above the 6x covenant on the company's $200 million five-year loan participation notes.

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