S&P rates Kazanorgsintez notes B-

Standard & Poor's said it assigned its B- rating to Kazanorgsintez SA's proposed participation notes.

The agency said that the proceeds are to be transferred to Russian petrochemical group Kazanorgsintez OJSC (B-/stable, Russia national-scale ruBBB), based on a trust deed and a loan agreement.

The agency noted that the ratings on Kazanorgsintez OJSC reflect the group's very large, mostly debt-funded growth capital expenditures, exposure to very cyclical markets, thin liquidity and corporate governance uncertainties.

These factors are partially offset by a historically comfortable EBITDA margin, averaging 25% over the past three years, thanks to cheap feedstock, favorable cycles, good market shares for the company's main products and fast-growing demand for polyethylenes in Russia, S&P added.

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