Fitch lifts Mangistau to BB

Fitch Ratings said it upgraded the Kazakhstan Region of Mangistau's long-term foreign- and local-currency ratings to BB from BB-, assigned a BBB+(kaz) national long-term rating to the region and affirmed its short-term foreign-currency rating at B.

The outlook is stable.

The agency said the upgrade reflects the consolidation of Mangistau's budgetary performance in 2006, during which the operating and current margins were maintained at the high levels reached in 2005. Regional capital expenditure has increased steadily to 16.7% in 2006 from 5.9% in 2001. Additionally, the region has been debt-free since 2001, while bank borrowings taken up by public sector companies remain negligible.

At the same time, Fitch said the regional economy has a strong bias toward the oil and gas sector, making it vulnerable to the commodity price fluctuations. Oil and gas companies accounted for 90% of 2005 regional industrial output, 67% of Gross Regional Product and 97.7% of regional exports.

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