S&P cuts Kazakhstan Temir Zholy, Kaztemirtrans to junk

Standard & Poor’s said it lowered its long-term corporate ratings on Kazakhstan Temir Zholy (KTZ) and its core subsidiary, JSC Kaztemirtrans (KTT), to BB+ from BBB-. The outlook is negative.

S&P also lowered the Kazakhstan national scale ratings on these entities to kzAA- from kzAA.

At the same time, S&P lowered its rating on KTZ’s senior unsecured bonds, including those issued by its financing subsidiary Kazakhstan Temir Zholy Finance BV, to BB+ from BBB-.

S&P said the downgrade primarily reflects S&P’s expectation that KTZ’s adjusted debt to EBITDA will increase to more than 5x by year-end 2015 and will not improve to a level S&P considers commensurate with a higher rating in 2016.

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