Fitch Assigns KazAgro USD1bn Eurobond ‘BBB’ Final Rating
May 28. Reuters
Fitch Ratings has assigned Kazakhstan National Managing Holding’s (KazAgro) USD1bn Eurobond issue (ISIN XS0934609016), due 2023, a final Long-term foreign currency rating of ‘BBB’.
KEY RATING DRIVERS
The Eurobond represents a senior and unsecured obligation of KazAgro. KazAgro has Long-term foreign currency rating of ‘BBB’, a Long-term local currency rating of ‘BBB+’ and a Short-term foreign currency rating of ‘F3’. The Outlooks for the Long-term ratings are Stable.
The bond has 20 semi-annual coupons with a 4.625% annual interest rate. The principal will be repaid on 24 May 2023. The proceeds from the new bond will be used for expanding KazAgro’s operating activity, including on-lending to subsidiaries.
KazAgro – a JSC with 100% ownership by the national government – acts as the government’s agent in implementation of a state policy in the area of agriculture. The sector is of high importance for the nation in the terms of production, employment and social issues.
KazAgro’s ratings reflect its state ownership, strategic importance for the national agricultural sector and hence potential government support. Fitch expects that KazAgro will continue to benefit from regular equity injections and access to subsidised government loans in the future. Fitch uses its public-sector entities rating criteria and applies a top-down approach in its analysis of KazAgro.
The issue’s rating would be sensitive to any movement in the KazAgro’s Long-term foreign currency rating.