Moody's rates KazMunayGas bonds Baa2

Moody's Investors Service said it assigned a rating of provisional Baa2 to an upcoming domestic bond issue of 248.65 billion Kazakhstani tenge to be issued by JSC National Co. KazMunayGas, the holding company of the Kazmunaygas Group, to the group's main exploration and production subsidiary, Kazmunaigas E&P, representing an intragroup transaction.

The outlook is negative.

The bond is expected to have a three-year maturity and a 7% coupon. The proceeds will be used to repay debt and for general corporate purposes. The obligations will rank pari passu with all senior unsecured and unsubordinated obligations.

Moody's said it regards the company as a government-related issuer and the ratings incorporate uplift from the company's baseline credit assessment of 12, which reflect a high implied state support assumption and the company's medium dependence.

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