Ratings

«S&P Global Ratings» «Fitch Ratings»
Current ratings BB
outlook negative
BBB-
outlook stable
April 1, 2020

On March 31, 2020 the International rating agency S&P Global Ratings has revised the credit rating outlook of JSC “KazTransOil” from “Stable” to “Negative” and affirmed “BB” rating. This change follows the similar rating action on JSC “KazTransOil”'s immediate parent JSC NC “KazMunaiGaz”.

January 27, 2020

KazTransOil JSC informs that on the 24th of January 2020 international rating agency Moody’s Investors Service has withdrawn credit rating at the “Baa3” level with positive outlook of KazTransOil JSC due to termination of the contract.

November 15, 2019

On November 15, 2019 the international rating agency Fitch Ratings (hereinafter -Fitch) affirmed default long-term rating of KazTransOil JSC (hereinafter - KTO) in foreign currency at the level of "BBB-" with a "Stable" forecast.

Fitch notes that KTO's ratings reflect its strong operating and financial performance. KTO maintains a dominant position in the oil transportation sector in the Republic of Kazakhstan, which is crucial for the economy of the country. KTO has strong operational and strategic ties with JSC NC “KazMunayGas”, which receives significant benefits from the free cash flow of KTO through dividends. In addition, the company is not directly affected by fluctuations of oil prices, which is a favorable factor for its business profile.

According to Fitch, KTO has a positive impact due to agreements with Russian companies on the transit of Russian oil to China and Uzbekistan through Kazakhstan. PJSC “Rosneft” increased its volumes of transportation through Kazakhstan to China from 7 million tons in 2017 to 10 million tons in 2018.

At the same time, Fitch analysts emphasize the ability of KTO to increase export tariffs, which is a favorable factor in the creditworthiness of KTO. A similar change in tariffs (an increase of 10%) was approved on April 1, 2018.

Fitch considers KTO's separate operating profile to be in line with the “bbb” rating category, which is being held back JSC NC “KazMunayGas” and the regulatory environment.

August 22, 2019

On August 22, 2019 following Kazakhstan’s sovereign rating affirmation and change of outlook to positive, the International rating agency Moody’s Investors Service (hereinafter – Moody’s) has changed the outlook of Kazakhstani corporates, including JSC KazTransOil, from stable to positive. JSC KazTransOil’s long term rating “Baa3” has been affirmed.

The change of Kazakhstan’s government outlook to positive was driven by Moody’s assessment that economic resilience in Republic of Kazakhstan is increasing, supported by robust growth prospects in both hydrocarbon and non – hydrocarbon sectors, and rising incomes.

The affirmation of Republic of Kazakhstan’s rating reflected the government’s strong balance sheet, supported by a low debt burden, sizeable financial buffers, and robust economic growth prospects.

August 8, 2019

The international rating agency, S&P Global Ratings (hereinafter – the Agency), has published an annual credit rating review of “KazTransOil” JSC (hereinafter – the Company) within the framework of which its basic scenario was updated. The Agency predicts stable operating performance and good creditworthiness of the Company in 2019. The rating by the Agency remains unchanged from the moment of its increase to the level “BB” with the forecast “Stable” in November 2018.

The Agency notes that the Company maintains a high level of financial flexibility due to its significant market share, good competitive position, lack of debt at the company level, as well as adequate cash management that allows generating positive cash liquidity to pay dividends and ensure all existing investment projects of the Company.

In addition, the current rating of the Company is still limited by the rating of the parent structure - JSC “NC “KazMunayGas” (hereinafter – KMG) (“BB”, with the forecast “Stable”), even though the Agency assesses Company’s creditworthiness at the level of “bb+”. The Company cannot be protected from the risks associated with its belonging to the KMG group; therefore, the Agency does not assign a subsidiary company a rating higher than the level of the parent structure.

The Agency informs that a positive action with respect to the Company's rating is possible in case of a similar rating action with respect to KMG.

June 19, 2019

International rating agency Moody's Investors Service published a credit opinion of «KazTransOil» JSC, according to which Moody’s continues to maintain the corporate credit rating of the Company at ‘Baa3’, the outlook is Stable.

Company’s credit profile benefits from the scale of the company’s operations, strong position in the Kazakhstan market, protected by its national operator status, strong financial position and lack of financial debt. Moody’s assessment that Company would benefit from a high level of support reflects the company’s strategic importance to the state and the importance of energy exports to the Kazakh economy’s growth.

November 12, 2018

On November 12, 2018 the international rating agency S&P Global Ratings (hereinafter – agency) raised JSC KazTransOil's (hereinafter – KTO) long-term credit rating to «BB» from «BB-» with a stable outlook following the upgrade of the immediate parent company JSC NC KazMunayGas (hereinafter – KMG).

According to the agency, the stable outlook mirrors that on KTO's immediate parent, KMG, and agency’s expectations of solid credit metrics supported by profitable midstream operations and absence of debt at the KTO level. Agency believes that KTO cannot be insulated from the risks attributable to the group, therefore agency does not rate the subsidiary above the parent.

Agency would likely raise the rating on KTO if they took a similar action on KMG.

April 26, 2018

On April 26, 2018 the international rating agency S&P Global Ratings (hereinafter – agency) affirmed national oil pipeline operator JSC KazTransOil's (hereinafter – KTO) long-term credit rating at «BB-» with a Stable Outlook on continued solid financial results.

Agency notes that KTO maintains good financial flexibility, thanks to its adequate cash position and lack of debt at the company level. In 2018-2019, agency expects KTO to continue generating strongly positive free operating cash flow on the back of the recent tariff increases for transit and export that the company announced. Agency thinks that KTO's sizable accumulated cash balances cover all existing investment projects and allow for high dividend payouts.

The affirmation reflects agency’s view of KTO's unchanged stand-alone credit profile of 'bb+'. Agency assesses that there is a high likelihood that KTO would receive timely and sufficient support from the government of Kazakhstan if needed.

However, the rating on KTO remains constrained by the rating on its parent, KMG (BB-/Stable/--). Agency believes KTO cannot be insulated from the risks attributable to the group, therefore agency does not rate subsidiary above the parent.

Agency would likely raise the rating on KTO if they took a similar action on JSC NC KazMunayGas.

March 29, 2018

On March 29, 2018 the international rating agency Fitch Ratings (hereinafter – Fitch) affirmed JSC KazTransOil's (hereinafter – KTO) Long-Term Foreign-Currency Issuer Default Rating at «BBB-» with a Stable Outlook.

Fitch notes that the ratings reflect KTO's strong operational and very strong financial profile, which Fitch expects it to maintain at least over the medium term, as well as its strategic importance to the economy of Kazakhstan. KTO's ratings are capped by those of its parent JSC NC KazMunayGas («BBB»-/Stable). KTO has strong operational and strategic ties with JSC NC KazMunayGas, which exercises significant influence over KTO's free cash flow through dividends.

Fitch expects KTO's domestic transportation volumes to somewhat increase following the completion of the upgrade of refineries. According to Fitch, export volumes may fall marginally due to depletion at some fields in the central part of Kazakhstan and redistribution of crude oil volumes from Kashagan through alternative routes. However, Fitch concludes that this trend will not weaken the company's business profile as lower exports should be offset by higher transit volumes. PJSC Rosneft Oil Company has increased its volumes through Kazakhstan to China from 7 million tons in 2017 to 10 million tons in 2018. In addition, KTO's transit volumes to Uzbekistan should reach 5 million tons in 2022 after a new refinery in Uzbekistan has come on stream.

In 2015 Kazakhstan's Committee for Regulation of Natural Monopolies and Protection of Competition approved five-year domestic tariff growth of 10% pa. KTO’s export tariffs will be increased by 10% starting from 1 April 2018. Fitch analysts also highlight KTO's ability to raise export and transit tariffs is beneficial for the KTO’s credit profile.

Fitch views KTO's stand-alone operational profile as commensurate with the 'BBB' rating category, limited by the regulatory environment and asset concentration in a single country.

November 27, 2017

On November 27, 2017 International rating agency Standard & Poor’s Global Ratings (hereinafter – S&P) reported the downgrade of JSC KazTransOil’s (hereinafter – KTO) long-term corporate credit rating to «BB-» from «BB», outlook «Stable».

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.

September 12, 2017

On September 12, 2017 following the recent revise of the outlook on sovereign credit ratings of Republic of Kazakhstan to «Stable» from «Negative» and the affirmation of the ratings at «BBB-», S&P affirmed the ratings of five Kazakh companies with a «Negative» outlook. So S&P affirmed JSC NC KazMunayGaz’s long-term global scale rating at «BB» and the national scale rating at «kzA», including KTO’s rating affirmed at «BB» with a «Negative» outlook.

S&P assesses KTO's stand-alone credit profile at «bb+», and expresses a high likelihood of extraordinary support in the event of financial stress would come directly from the government, and considers a high strategic importance for its parent – KMG. S&P currently doesn’t factor into the rating uplift for potential government support, considering the relatively high stand-alone credit profile.

The «Negative» outlook on KTO reflects the outlook on the KMG, and according to S&P, the rating is capped at the level of the rating on KMG.

S&P would likely revise the outlook on KTO to «Stable» if the rating agency took a similar action on KMG.

Current rating of JSC KazTransOil is «BB».

August 1, 2017

On August 1, 2017 International rating agency Moody’s Investors Service (hereinafter – Moody’s) changed to «Stable» from «Negative» the outlook on the ratings of eight Kazakhstani government-related companies, including JSC KazTransOil, the rating affirmed at «Baa3».

On August 1, 2017 International rating agency Moody’s following the recent change of the outlook on Kazakhstan's government bond rating to «Stable» from «Negative» and the affirmation of the rating at Baa3, changed to «Stable» from «Negative» the outlook on the ratings of eight Kazakhstani government-related companies in the oil and gas, mining, transportation and defence sectors, including JSC KazTransOil, the rating affirmed at «Baa3».

Moody’s notes, that as a result of this rating action, respective baseline credit assessments of eight government-related companies have been affirmed, and their support and dependence assumptions remain unchanged.

The «Stable» outlook on ratings of 8 Kazakhstani companies is in line with the «Stable» outlook for Kazakhstan's sovereign rating and reflects Moody's expectation that each company's specific credit factors, including their operating and financial performance, market position and liquidity, will remain commensurate with their ratings on a sustainable basis.

Current rating of JSC KazTransOil is «Baa3».

September 14, 2016

On September 9, 2016 Fitch Ratings affirmed Kazakhstan-based JSC KazTransOil’s (hereinafter – KTO) Long-Term Foreign Currency Issuer Default Rating (IDR) at ‘BBB-’ with a Stable Outlook.

The ratings reflect KTO's strong operational and financial profile, which the company to maintain at least over the medium term, as well as its strategic importance to the economy of Kazakhstan.

Its ratings are capped by those of its parent, JSC National Company KazMunayGas (hereinafter – KMG, ‘BBB’-/Stable). Fitch caps KTO’s ratings at the KMG’s level because the parent exercises significant influence over KTO’s free cash flow through dividends, which KMG uses to service its large standalone unadjusted debt of KZT 3,1trn (USD 9,3bn) at end-June 2016. KTO’s dividend payout ratio for 2015 was 114% and ranged from 66% to 231% in 2011-2015.

KTO’s domestic transportation tariffs are regulated by Kazakhstan’s Committee for Regulation of Natural Monopolies (CRNM). In 2015, CRNM approved five-year domestic tariff growth of 10% p.a. Subsequently, KTO raised its domestic tariff by10% on 1 October 2015 and by another 10% at the beginning of 2016. Further 10% annual increases are expected in 2017-2019, improving the visibility of KTO’s future revenue.

KTO has no financial debt.

Fitch views KTO’s operational profile as commeasure with the ‘BBB’ rating category, limited by the regulatory environment and asset concentration in a single country. Fitch expects, that in the event of financial stress, the state would support KTO, either directly through equity contributions or loans from state-owned banks and funds, or indirectly through higher transportation tariffs.

KTO holds monopolistic position in domestic oil transportation.

May 5, 2016

On May 5, 2016 International rating agency Fitch Ratings (hereinafter – Fitch) following its recent downgrade of Kazakhstan’s sovereign ratings has downgraded the ratings of several Kazakh corporates, including JSC NC “KazMunayGas” and JSC “KazTransOil” to “BBB-”, the outlook is Stable.

“KazTransOil”'s ratings are capped by those of JSC NC “KazMunayGas”, its majority shareholder, due to the parent's significant influence over “KazTransOil”'s free cash flow through dividends. Downgrade of “KazTransOil”’s rating followed by same action toward JSC NC “KazMunayGas”.

May 4, 2016

The International rating agency Moody’s Investors Service has confirmed the Baa3 issuer ratings of Kazakh government-related issuers operating in the oil and gas sector – JSC NC “KazMunayGas” and its direct and indirect subsidiaries including JSC “KazTransOil”. The outlook on the ratings is negative.

On 22 January 2016, Moody's placed the ratings of 32 integrated oil, exploration and production, and oilfield service companies in the EMEA (Europe, Middle East and Africa) region on review for downgrade. This reflected the substantial drop of oil prices and the continued oversupply in the global oil markets.

By virtue of its ownership structure, Moody's considers JSC “KazTransOil”. to be a government-related issuer. Confirmation of JSC “KazTransOil”’s rating on Baa3 level comprises (1) a baseline credit assessment of ba1, which measures the company's underlying fundamental credit strength; (2) the Baa3 local-currency rating of the Kazakhstan government, with a negative outlook; (3) high dependence between the state and the company; and (4) Moody's assumptions of a high level of support from the state in case of need.

The application of Moody's Global Midstream Energy methodology, published in December 2010, results in an A rating for JSC “KazTransOil”. However, the rating agency believes that the geopolitical risks associated with operating in Kazakhstan, as well as risks related to falling transportation volumes and growing competition from third-party pipelines justify positioning the company's baseline credit assessment in the "ba" rating category.

The negative outlook on the ratings is in line with the negative outlook for the sovereign rating and reflects the fact that a potential further downgrade of Kazakhstan's sovereign rating may lead to downgrade of the companies' ratings.

February 23, 2016

On February 19, 2016 Standard and Poor’s revised for downgrade ratings of Kazakhstan-based companies in the commodity exports, infrastructure, and utility sectors, including NC JSC «KazMunayGas» (hereinafter – KMG) and JSC «KazTransOil» (hereinafter – KTO). The downgrade of ratings is due to downgrade of sovereign rating of Republic of Kazakhstan to «BBB-», outlook «Negative» on February 17, 2016, which is based on weaker growth outlook of the economy.

Standard and Poor’s note, that downgrade of KTO’s rating reflects the downgrade of KTO’s parent – KMG. Taking into account KTO's status as a «strategically important» subsidiary of KMG and the point of Standard and Poor’s that there is a «high» likelihood that KTO in the event of financial stress would receive timely and sufficient extraordinary support directly from the government, Standard and Poor’s revised KTO’s long-term rating similar to KMG’s rating on the level of «BB», outlook «Negative».

January 29, 2016

Due to the deterioration of oil prices not seen in a more than a decade, Moody’s placed the ratings of 32 integrated oil, exploration and production, and oilfield services companies in the EMEA region (Europe, Middle East and Africa) on review for downgrade, including JSC NC “KazMunayGas” (KMG) and KTO.

Decision for review of KTO’s rating for downgrade is due to similar action of Moоdy’s to the rating of KTO’s parent company - KMG. Moody’s consider, that KMG is exposed to the decline in oil price, that have reached nominal price lows not seen in more than a decade.

Moody’s analysts note, that current KTO’s rating Baa3 reflects its strong rates of operating activities and creditworthiness, as well as its strategic importance for the government of Republic of Kazakhstan. As analysts assess, the high level of support from the government reflects KTO’s strategically essential role for the government and the importance of energy exports to the Kazakhstan economy's growth.

According to analysts, KTO is characterized as a company with strong market position, diversified customer base, lack of debts on its level and satisfied indicators of liquidity.

Moody’s expects cash flow generation at KTO in 2016 to comfortably cover its maintenance capex, as well as dividend payouts in the amount of 40% of net profit.

Current rating of JSC “KazTransOil” is Baa3.

September 9, 2015

Fitch Ratings has affirmed KTO’s long-term foreign currency Issuer Default Rating (hereinafter - IDR) at “BBB” with a Stable Outlook. Fitch has simultaneously upgraded KTO’s Long-term local currency IDR to 'BBB+' from 'BBB' with a Stable outlook. KTO’s National Long-term rating and National senior unsecured rating have also been upgraded to “AAA(kaz)” from “AA+(kaz)” to reflect the upgrade of KTO’s Long-term local currency IDR.

KTO’s ratings reflect its strong operations and credit profile, which Fitch expect will maintain at least over the medium term, and its strategic importance to the economy of Kazakhstan.

Fitch mention that KTO’s ratings are capped by those of JSC NC “KazMunayGas” (hereinafter - NC KMG, BBB/Stable), KTO’s majority shareholder. Fitch cap KTO’s ratings at NC KMG’s level because the parent exercises significant influence over KTO’s free cash flow through dividends, which NC KMG needs to service its large standalone debt of KZT3.2trn (USD17.3bn) at end-March 2015. KTO’s dividend payout ratio for 2014 was 100% and has been relatively high historically, ranging from 66% to 231% in 2011-2014.

Fitch considers that KTO’s uncapped ratings are in the low ‘A’ category.

Fitch point out that KTO dominates the Kazakh oil transportation sector and as a national operator holds a monopolistic position in domestic oil transportation. KTO estimates that in 2014 it shipped 53% of crude produced in Kazakhstan, excluding the volumes shipped by its two JVs with China National Petroleum Corporation, which operate the major parts of the 20m tons per annum capacity Kazakhstan-China oil pipeline.

Fitch also believe that in the event of financial stress, the state would support KTO, either directly through equity contributions or loans from state owned banks and funds, or indirectly through higher transport tariffs.

April 27, 2015

The International rating agency Standard & Poor’s (hereinafter - S&P) affirmed rating of JSC «KazTransOil» (hereinafter – KTO) at «BB+», the outlook is Negative.

The affirmation reflects the view of S&P that KTO continues to enjoy a "high" likelihood of timely and sufficient extraordinary government support from the government of Kazakhstan.

S&P also continue to see KTO as a "strategically important" subsidiary of the KMG group. KTO's "strategically important" status within the KMG group and its importance to the government of Kazakhstan are underpinned, by the view of S&P, by the company's role as the main oil pipeline network operator in the country, transporting more than 53% of oil volumes in the country.

S&P consider KTO's role for the government to be "very important" and the link between the company and the government to be "strong". S&P also assume that extraordinary state support would likely come directly from the government.

S&P point out that in accordance with rating methodology, the rating on KTO is capped by the rating on its parent, KMG (BB+/Negative).

According to S&P, KTO has a solid market position and limited competition from rail and tanker transport, owing to Kazakhstan's land-locked location, geographic isolation from the Caspian Sea, and the low cost of pipeline transportation. However, S&P assess country risk in Kazakhstan as "high," and consider tariff regulation to be opaque and irregularly revised.

S&P mention that KTO group has a favorable debt structure - all of outstanding debt is currently at the level of the operating subsidiaries and joint ventures. KTO also enjoys good financial flexibility, thanks to its adequate cash position, flexibility to defer most of its new projects, and available borrowing capacity. In 2015, S&P expect KTO to continue generating strongly positive free operating cash flow on the back of the tariff increases that took place in 2014. S&P think that KTO's sizable accumulated cash balances cover all existing investment projects and allow for high dividend payouts.

S&P analysts notes that KTO’s rating might be lowered if company undertakes new investment projects requiring significant external borrowing, resulting in weakened credit measures, or if any substantial unfavorable changes in new contracts with customers will be applied. The revise of the outlook on KTO back to stable might be if S&P will take a similar action on the parent company.

April 7, 2015

Moody’s affirms rating of JSC «KazTransOil» (hereinafter – KTO) at «Baa3» and stabilizes the outlook.

The action follows the sovereign action on Kazakhstan on 31 March 2015.

The stable outlook reflects Moody's view that the linkage between KTO and Government remain strong, and Government will provide support in the event of distress.

February 24, 2015

The International rating agency Standard & Poor’s (hereinafter - S&P) downgraded rating of JSC «KazTransOil» (hereinafter – KTO) to «BB+» from «BBB-», the outlook is Negative.

The rating actions follow the downgrades of Republic of Kazakhstan on Feb. 9, 2015 and JSC NC KazMunayGas on Feb. 16, 2015. The downgrade of KTO reflects the view of S&P that KTO’s rating is capped at its status as strategically important subsidiary of KMG group, and view that there is a high likelihood that KTO will receive timely and sufficient extraordinary support in the event of financial stress.

According to S&P, KTO’s strategically important status within the KMG group and its importance to the government of Kazakhstan are underpinned by the KTO’s role as the main pipeline network operator in the country.

S&P highlights that KTO’s stand-alone credit profile (bb+) exceeds same indicator of KMG (b).

Also, S&P analysts mention KTO’s solid market position, limited competition from rail and tanker transport, no debt at KTO level, good financial flexibility due to adequate cash position, and potential to defer most of new projects.

S&P expects that in 2015 KTO will continue to generate strongly positive free operating cash flow on the back of the tariff increases that took place in 2014. S&P think that KTO’s sizable accumulated cash balances cover all existing investment projects and allow for high dividend payouts.

September 3, 2014

On 28 August 2014 Fitch Ratings (hereinafter – Fitch) has affirmed JSC KazTransOil's (hereinafter - KTO) Long-term foreign currency Issuer Default Rating (IDR) at 'BBB' with a Stable Outlook.

KTO's ratings reflect its strong operations and credit profile, which as Fitch expects will maintain at least over the medium term, and its strategic importance to the economy of Kazakhstan.

Fitch noted KTO as champion in Kazakhstan oil transportation field. KTO dominates the Kazakh oil transportation sector, which is critical for the national economy. In 2012, KTO received 'national operator' status, which legally protects its monopolistic position.

KTO ratings capped by the parent organization NC KMG's level because the parent exercises significant influence over KTO's free cash flow through dividends, which NC KMG needs to service its large standalone debt. At the same time KTO separately has solid liquidity and no debt. Fitch consider that KTO's uncapped ratings are in the low 'A' category.

Fitch believe that in the event of financial stress, the state would support KTO, either directly through equity contributions or loans from state-owned banks, or indirectly through higher tariffs.

Analysts noted KTO’s stable operations. In 2013, KTO's crude turnover (excluding JVs) reached 37 billion tonne-kilometres, up 7% yoy; in 1H14 the turnover was down 2% on 1H13. We expect that KTO's volumes and turnover will decline gradually over the medium term, reflecting maturing production at Kazakhstan's key oilfields.

KTO's tariffs increase in 2014 mitigated the effect of devaluation of national currency. Fitch view timely tariff indexation as essential for KTO's sound financial performance.

Fitch noted solid credit profile of KTO despite significant capex. According to Fitch’s expectations KTO's annual capex may exceed KZT50bn in 2014-2018, compared with KZT33bn in 2013, as it is undertaking two significant projects: construction of the second line of the Kazakhstan-China pipeline to boost its capacity to 20 million tonnes per annum and upgrades of the Karazhanbas-Aktau and Uzen-Aktau pipelines. We expect KTO to report negative FCF until 2018 due to higher capex, but FFO adjusted net leverage should remain under 0.5x in the medium term.

June 19, 2014

June 17, 2014 the International rating agency Standard & Poor’s (hereinafter - S&P) revised outlooks on seven Kazakhstan government-related entities from Stable to Negative after sovereign outlook revision; ratings affirmed.

According to S&P the outlooks on the following government-related entities revised to Negative: Samruk-Kazyna, Development Bank of Kazakhstan, JSC DAMU Entrepreneurship Development Fund, JSC KazAgro National Management Holding, JSC NC KazMunayGas, JSC KazMunaiGas Exploration Production, JSC KazTransOil (hereinafter – KTO).

S&P explained that the outlook revisions followed by recent revision of outlook on the Republic of Kazakhstan to Negative from Stable.

S&P anticipates that as long as KTO remains a "strategically important" entity of the KMG group, the rating on the company, which is capped by that of the parent, is moving in line with the rating of KMG. In addition, rating of KTO reflects the expectations of S&P regarding a high likelihood of timely and sufficient extraordinary state support.

Credit rating of KTO is «BBB-», outlook Negative.

June 16, 2014

The International rating agency Standard & Poor’s (hereinafter - S&P) affirmed rating of JSC «KazTransOil» (hereinafter – KTO) at «BBB-», the outlook is Stable.

S&P affirmed KTO’s credit rating at «BBB-» with a stable outlook.

S&P estimate of KTO's credit rating was based on estimate of the company's business risks profile at the acceptable level, and the financial risks profile - at the moderate level. S&P notes that KTO has solid market and competitive positions, plays the role of the main operator of the country oil pipeline network, has favorable debt structure and maturity profile, with no debt at KTO level, as well as adequate liquidity and a sizable amount of accumulated cash.

Rating of KTO reflects its financial flexibility, long-term contracts with oil producers, and stable regulated cash flows from oil transportation.

KTO gets benefits from its role as a strategic infrastructure services provider to its parent company – JSC NC «KazMunayGas» (hereinafter - KMG) and to the Kazakh government. According to S&P, KTO's status as "strategically important" entity within the KMG group and its importance to the government of Kazakhstan are underpinned by the company's role as the main operator of the country oil pipeline network. S&P believes that KTO would receive timely and sufficient government support if needed.

S&P anticipates that as long as KTO remains a "strategically important" entity of the KMG group, the rating on the company, which is currently capped by that on the parent, will move in line with the rating of KMG. Accordingly, only the improvement of stand-alone credit profile KMG to at least 'bb-' would lead to upgrade of KTO.

The stable outlook for KTO incorporates S&P expectations that the company will continue to benefit from its solid market and competitive positions, long-term contracts with oil producers, and stable regulated cash flows from oil transportation. The stable outlook also reflects the outlook on the parent company - KMG, which owns 90% of KTO's shares.

S&P considers that the financial risks' profile of KTO is moderate, since KTO has favorable debt structure - all of its outstanding debt is currently at the operating subsidiaries and joint ventures. S&P notes that KTO has a good financial flexibility, thanks to its adequate cash position, potential for deferral of most of new projects, as well as to the available borrowing capacity. S&P expects that KTO in the midterm will continue generating strongly positive operating cash flow due to the tariff adjustments in 2014. S&P estimates that sizable accumulated cash balances of KTO are sufficient to finance all existing investment projects and allow high dividend payouts.

August 29, 2013

Fitch international rating agency has upgraded JSC KazTransOil's (hereinafter - Company) rating to 'BBB' from 'BBB-'. The Outlook is Stable.

The upgrade of Company is driven by its strong operating and credit profile, which we expect it to maintain at least over the medium term, and its strategic importance to the economy of Kazakhstan (BBB+/Stable). Company's ratings are capped by those of its parent JSC National Company KazMunayGas (NC KMG, BBB/Stable).

August 21, 2013

The international rating agency Moody`s Investors Service changed outlook to “Positive” affirming the corporate credit rating of "KazTransOil" JSC (hereinafter – the KTO or Company) at level "Вaa3".

August 12, 2013

The international rating agency Moody's affirmed the rating of JSC KazTransOil (hereinafter – Company) at ‘Baa3’, the outlook is Stable.

Company’s credit profile benefits from the scale of the company’s operations and revenue stream stability, strong position in the Kazakhstan market, protected by its national operator status, low medium-term risk of losing transportation volumes, strong profitability metrics and low leverage. Moody’s assessment that Company would benefit from a high level of support reflects the company’s strategic importance to the state and the importance of energy exports to the Kazakh economy’s growth.

July 5, 2013

International rating agency Standard & Poor’s (hereinafter - S&P) affirmed rating of KazTransOil JSC (hereinafter – Company) at ‘BBB-‘, the outlook is Stable.

The rating reflects S&P view that there is a “high” likelihood that the company would receive timely and sufficient extraordinary government support in the event of need. Company’s credit quality is supported by its strong market and competitive positions, long-term contracts with oil producers and stable regulated cash flows from oil transportation.

Company’s core status within the KMG group and its strategic importance to the government of the Republic of Kazakhstan are underpinned, in the view of S&P, by the company’s role as the main oil pipeline network operator in the country.
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