S&P Retains Ratings On Kazakh Tsesna-Garan Company

KazMunayGas Rating Lowered To 'BB-' On Weakening State Support

The international Rating Agency S&P Global Ratings has kept its ratings on Kazakhstan-based Insurance Company Tsesna-Garant (B+/Stable/–; ‘kzBBB’) unchanged in spite of the announcement that its parent bank, Tsesnabank has been chosen as one of the preferred buyers for a 41.9 percent stake in Bank CenterCredit, the rating agency said Feb. 13.

The deal is subject to regulatory approval, which is expected to occur in the second quarter of 2017.

“The ratings on Tsesna-Garant, which is insulated from its parent, continue to reflect the insurer’s stand-alone credit characteristics, including our view of its vulnerable business risk profile and weak financial risk profile,” S&P said.
S&P regards the company’s enterprise risk management as weak but improving.

The rating on Tsesna-Garant is currently at the same level as the rating on Tsesnabank. Because S&P considers the insurer to be insulated from its parent, the rating on Tsesna-Garant can be up to one notch higher. This reflects the view of the regulatory framework that provides protection against parent intervention, as well as the insurer’s track record of operations and its lower reliance on parental support than in previous years.

As such, if the rating agency was to downgrade Tsesnabank, it could maintain the one-notch differential between Tsesna-Garant and its parent.