Fitch lowers Kazakhstan Utility

Fitch Ratings said it downgraded Kazakhstan Utility Systems' long-term foreign-currency issuer default rating to B+ from BB-.

The senior unsecured debt also was downgraded to B+ from BB- with a RR4 recovery rating, indicating 50% expected default recovery.

The outlook is stable.

The downgrades reflect expectations that the company's funds from operations-to-adjusted gross leverage will deteriorate to more than 3x through 2021, mainly on the back of lower than expected approved tariffs and higher than expected guarantee amount, Fitch said.

The ratings are constrained by weak corporate governance, reflected in credit-negative transactions with third parties, still limited scale of operations and an evolving regulatory framework, the agency said.

The ratings are supported by the company's vertical integration and negligible foreign-currency exposure, Fitch said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.