Moody's drops Temir Zholy

Moody's Investors Service said it has downgraded to Baa2 from A3 the issuer rating of JSC National Co. Kazakhstan Temir Zholy's and the rating of the senior unsecured eurobonds, amounting to $800 million, issued by Kazakhstan Temir Zholy Finance BV, a special purpose financial company, and guaranteed by it and its operating subsidiaries.

The outlook is stable.

The agency said that the rating action concludes the review for possible downgrade that was initiated on Jan. 21 due to the challenging market environment facing the company and Moody's decision to reassess the support and default dependence assumptions embodied in the company's ratings under the agency's rating methodology for government-related issuers to incorporate increasing reliance of key domestic businesses in the Republic of Kazakhstan on the government financial support.

The rating action reflects Moody's following decisions: (i) lowering of Temir Zholy's standalone credit assessment, (ii) increase the default dependence assessment for the company to the high end of the medium category and, at the same time, (iii) take into account for the company's ratings the Baa2 foreign currency sovereign rating of the supporter, the government of the Republic of Kazakhstan.

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