Moody’s changes KZT, KTT views to negative

Moody's Investors Service said it changed the outlook on the Baa3 issuer and senior unsecured ratings of JSC National Co. Kazakhstan Temir Zholy (KTZ) and its guaranteed subsidiaries, as well as the Ba1 corporate family rating and Ba1-PD probability of default rating of KTZ's wholly owned operating subsidiary Kaztemirtrans, JSC (KTT), to negative from stable.

At the same time, the agency affirmed the Baa3 issuer and Ba1 corporate family ratings of the two companies.

Concurrently, Moody's lowered the baseline credit assessment to ba3 from ba2 for KTZ and to b2 from b1 for KTT. This follows sustained deterioration of their standalone credit profiles, primarily as a result of the recent tenge devaluation and a weakening macroeconomic environment.

"Our decision to change the outlook to negative primarily reflects our concerns over covenant compliance, operating performance and liquidity of the companies in the next 18 months," Julia Pribytkova, Moody's vice president, senior analyst and lead analyst for the issuers, said in a news release.

"On the other hand, today's affirmations reflect our expectation that both companies will continue to receive significant governmental support."

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