Moody's rates Kazkommertsbank notes Baa2

Moody's Investors Service said it assigned a long-term Baa2 rating to the €300 million drawdown under Kazkommerts International BV's $1.5 billion guaranteed debt issuance program. The five-year notes will be unconditionally and irrevocably guaranteed by Kazakhstan-based JSC Kazkommertsbank and will represent unsubordinated and unsecured obligations of the issuer and the guarantor.

The outlook is stable.

The ratings reflect the vital role Kazkommertsbank plays in Kazakhstan's economy and the likelihood of it receiving support from the government in case of distress, the agency said. The ratings also take into account the fact that Kazkommertsbank is the largest bank in Kazakhstan and over a relatively short period has been able to develop an important franchise in the domestic, corporate and retail market.

Moody's said the ratings are constrained by the probability of a sovereign default implied by the Kazakh government's low investment-grade Baa3 foreign currency bond rating, the likelihood that the Kazakh government could impose a debt moratorium in the event of default on its own foreign currency obligations and the bank's refinancing risk, which has grown considerably over the last few years as the bank tapped international capital markets with several issues which exhibit certain maturity concentrations, particularly in years 2013 to 2015.

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