S&P rates Kazkommerts Finance notes B

Standard & Poor's said it assigned an indicative B debt rating based on draft documents to the perpetual loan participation notes to be issued by Kazkommerts Finance 2 BV, a Netherlands-based special-purpose vehicle, to be issued in October.

The notes have the sole purpose of funding a perpetual subordinated loan to Kazakhstan-based Kazkommertsbank (JSC) (BB/stable/B). The loan is intended to qualify as tier 1 capital for Kazkommertsbank under local regulatory rules.

S&P said the ratings on Kazkommertsbank reflect the rapid loan growth and significant, but reducing, concentrations in lending and funding in a high-risk economic and banking environment. Furthermore, fast loan growth has pressurized capitalization, which needs to be addressed soon.

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