S&P rates Kazkommerts bonds BB-, B

Standard & Poor's assigned a BB- rating to Kazkommerts International BV's proposed $200-$250 million eurobond and a B rating to the $100 million subordinated loan participation notes to be issued by Citigroup Global Markets Deutschland AG & Co. KgaA to finance a subordinated loan to Kazkommertsbank.

S&P said the ratings reflect Kazkommertsbank (JSC)'s strong domestic franchise and improving economic environment and funding profile.

Kazkommertsbank has been using Kazakhstan's improved economic prospects to its advantage, attracting primary funds and growing its profitable lending business, although fast loan growth in recent years is considered risky, S&P said.

The decision of the European Bank for Reconstruction and Development to invest into the equity of Kazkommertsbank as well as the reversal of the bank's policy on financing the equity investments of its sister company Central Asian Industrial Investments have improved Kazkommertsbank's credit profile.

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