On November 27, 2017 following the downgrade of the rating of NC JSC KazMunayGas (hereinafter – KMG) to «BB-» from «BB» with a «Stable» outlook, S&P reported the downgrade of KTO’s long-term corporate credit rating to «BB-» from «BB», outlook «Stable». S&P caps KTO’s rating at the level of KMG, owing to KTO's status as a strategically important subsidiary of the KMG group and assumes, that there is a high likelihood that KTO would receive timely and sufficient extraordinary support from the government of Kazakhstan in the event of financial stress. According to S&P, there is no uplift for potential government support on KTO’s rating, given KTO's relatively high stand-alone quality at «bb+», that is higher KMG’s stand-alone credit profile («b»).
S&P notes, that KTO's stable outlook mirrors that on KMG. S&P expects any negative or positive rating action on KTO would likely stem from a similar rating action on KMG rather than from a change in KTO's stand-alone credit quality.
