Baku, Azerbaijan, Dec. 22
By Ali Mustafayev – Trend:
S&P Global Ratings revised its outlook on Kazakhstan-based electricity group Samruk-Energy to positive from stable.
At the same time, S&P affirmed 'B+' long-term and 'B' short-term corporate credit ratings and 'kzBBB' Kazakhstan national scale long-term rating on the company.
“Our 'B+' issue rating on Samruk-Energy's $500 million senior unsecured notes remained unchanged when they were repaid on December 20, 2017. The outlook revision reflects our expectation that Samruk-Energy's credit metrics could improve in the coming years, if its disposals of subsidiaries support further deleveraging and if its liquidity strengthens,” the company said in a message.
S&P expects Samruk-Energy will continue generating operating cash flow that suffices to fund its reduced but still significant investment program.
“We forecast the company's S&P Global Ratings' adjusted debt to EBITDA will decrease to 4.0x-4.5x at the end of 2017 and to less than 4.0x in 2018, from about 5.0x in 2016, if disposals progress as planned and if Samruk-Energy uses the proceeds for deleveraging,” S&P reported.
Samruk-Energy has refinanced its remaining $420 million Eurobonds (it repaid $80 million ahead of schedule in September 2017), using funding from the local market, the European Bank for Reconstruction and Development (EBRD), and its own sources. Consequently, the company's exposure to vulnerability of Kazakhstan's banking system and potential limitations on available funding has decreased.
“However the banking system remains weak. Samruk-Energy's new debt maturity profile is smooth and manageable, in our opinion, although it still bears exposure to exchange-rate fluctuations, with 15 percent-20 percent of the debt portfolio still denominated in U.S. dollar after the refinancing. We therefore now assess Samruk-Energy's stand-alone credit profile (SACP) at 'b', compared with 'b-' previously”.