(Standard & Poor’s) – The rating on Kazakhstan’s national railway operator Kazakhstan Temir Zholy (KTZ) reflects Standard & Poor’s Ratings Services’ opinion that there is a very high likelihood that the Republic of Kazakhstan (foreign and local currency BBB+/Stable/A-2; Kazakhstan national scale kzAAA/—/—) would provide timely and sufficient extraordinary support to KTZ in the event of financial distress. Our rating on KTZ is three notches above its stand-alone credit profile (SACP) of bb-.

S&P consider KTZ to be a government-related entity (GRE). In accordance with their criteria for GREs, their view of a “very high” likelihood of extraordinary government support is based on S&P’s assessment of KTZ’s:

• “Very important” role in Kazakhstan’s economy as a national railroad company. KTZ plays a key role in land-locked Kazakhstan’s vital national transport sector; and
• “Very strong” link with the Kazakh government, which fully owns KTZ indirectly via sovereign wealth fund Samruk-Kazyna (BBB+/Stable/A-2), and provides ongoing financial support and monitoring. We do not foresee any privatization risk in the near to medium term.

Summary

• Credit rating: BBB-/Stable/—
• Country: Kazakhstan
• Primary SIC: Railroads