Azerbaijan, Baku, July 20 / Trend /
Fitch Ratings has affirmed Kazakhstan's national atomic company Kazatomprom's long-term foreign currency Issuer Default Rating (IDR) at 'BBB-', short-term IDR at 'F3' and foreign currency senior unsecured rating at 'BBB-', the agency reported on Friday. Fitch has simultaneously revised the Rating Outlook on the Long-term IDR to Stable from Negative.
According to the report, the Outlook revision reflects Fitch's comfort in Kazatomprom's ability to boost its uranium production and obtain significant dividends from its joint ventures (JVs) and associates.
In 2011, dividends received increased dramatically to KZT 19.7 billion from KZT 5.7 billion in 2010, as JVs and associates continued to ramp up their production and moved into a stable cash-generating phase. As a result, Kazatomprom reported a substantial decrease of funds from operations (FFO) adjusted leverage to 2.1x, the report said.
Fitch rates Kazatomprom on a standalone basis, as legal, operational and strategic ties between the company and Kazakhstan (rated 'BBB'/Positive/'F3' by Fitch), its ultimate parent, are considered limited, according to Fitch's Parent and Subsidiary Rating Linkage criteria dated 12 August 2011. Fitch notes that Kazatomprom's rating incorporates implicit state support in the form of certain privileges in obtaining subsoil use agreements through direct negotiations with the Kazakh government and the state participation in negotiation with certain foreign customers.
Fitch notes that Kazatomprom's intensive investment programme of about KZT 290 billion over 2012-2014 is likely to be partly funded with additional debt. Using conservative uranium price and sales volume assumptions, Fitch expects Kazatomprom's FFO adjusted leverage to remain at around 2.5x and FFO interest coverage to stay in a range of 7x-12x in 2012-2015.
Over 60 percent of the Kazatomprom's debts are due in 2015 and it needs to repay KZT 22 billion of loans maturing in 2012. Its total indebtedness at 31 December 2011 includes other financial liabilities of KZT 47.4 billion that are mainly guarantees of minimum distribution to Beijing Sino-Kaz Uranium Resources, a JV partner, for KZT 45 billion until 2033, the agency said.