S&P places ratings of Kazakh railroad company on CreditWatch
Standard & Poor's Ratings (S&P) Services placed Apr. 21 its 'BB' long-term corporate credit rating on Kazakhstan's national railroad company Kazakhstan Temir Zholy (KTZ) and its core subsidiary - freight-wagon owner JSC Kaztemirtrans (KTT) on CreditWatch with negative implications, the agency reported.
The agency also placed 'kzA' Kazakhstan national scale rating on KTZ on CreditWatch negative.
"The CreditWatch placement primarily reflects that KTZ has not yet secured refinancing for its $350 million notes that mature on May 11, 2016," said the agency.
The S&P may lower the ratings on KTZ by more than one notch if the company fails to seal the refinancing deal over the coming weeks.
The agency also said that with less than one month remaining before the maturity date, KTZ's ability to finalize the transaction is vulnerable to any further delays in its negotiations with creditors or delays for any other reason.
Meanwhile, the S&P estimates that KTZ had about $320 million (109 billion Kazakh tenges) of cash and cash equivalents as of Jan. 1, 2016, which continue to be available to the company and could be used for refinancing purposes if part of external financing is delayed for any reason.
The agency's rating on KTZ also incorporates its assumption that there is a very high likelihood that KTZ's owner - the Kazakh government - would be able to provide extraordinary support to the company should it be needed to meet the maturing obligations.
"The CreditWatch negative placement reflects the possibility that we could lower the rating by more than one notch if the company does not finalize the refinancing deal over the next few weeks or is unable to accumulate the full amount to repay the notes falling due in May," said S&P.
The S&P plans to resolve the CreditWatch over the coming weeks, once the agency have a clear view whether the company will be able to repay maturing notes on time or not.
---
Follow us on Twitter @AzerNewsAz