Moody’s lowers Kazakhstan Engineering, notes

Moody's Investors Service said it downgraded JSC National Co. Kazakhstan Engineering's corporate family rating to Ba3 from Ba2.

The agency also downgraded the probability of default rating to Ba3-PD from Ba1-PD, national scale rating to Baa3.kz from Baa1.kz and the rating of the $200 million three-year notes due 2016 to Ba3 (LGD4) from Ba2 (LGD5).

The outlook is negative.

Concurrently, Moody's downgraded the baseline credit assessment, which reflects the standalone credit strength, to b3 from b2.

Moody’s said the action reflects Kazakhstan Engineering’s weak liquidity and heightened refinancing risk in relation to its $200 million notes due 2016, as well as the potential for further short-term deterioration of already weak financial metrics.

A recovery in the company's metrics to levels commensurate with a higher BCA and rating over the next 12 to 18 months is unlikely, given the tenge devaluation and weakening macroeconomic environment, the agency said.

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