Baku, Azerbaijan, May 7
By Ali Mustafayev – Trend:
Kazakhstan’s National Management Holding Baiterek remains the state financing vehicle to promote Kazakh economy diversification and infrastructure development by funding investment in various non-resource sectors, particularly via the Development Bank of Kazakhstan, Fitch Ratings said in a message.
“Baiterek is the only state institution of that kind, so it is difficult to substitute it in the medium term, and disruptions of Baiterek's operations would temporarily hamper state funding of the country's economic development,” the message said.
Fitch views Baiterek as a financial agent of Kazakhstan's government and considers that Baiterek's default would materially impair investors' confidence in the credibility of the Kazakh government, leading to a significant increase in cost of funding or even temporary closing of external debt markets for the sovereign.
"On an individual basis, Baiterek relies on the state or state-related institutions as a sole source of funding, its leading portfolio companies are active market players tapping international and domestic bond market, borrowing from foreign banks and international financial institutions. Additionally Baiterek issued several guarantees to attract international funding to support investment in the local economy," Fitch said.
Fitch Ratings has affirmed Kazakhstan's JSC National Management Holding Baiterek's (Baiterek) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at 'BBB', National Long-Term rating at 'AAA(kaz)' and Short-Term Foreign-Currency IDR at 'F2'. The Outlooks on the Long-Term ratings are Stable. Fitch has also affirmed Baiterek's senior unsecured domestic debt at 'BBB'/'AAA(kaz)'.
Baiterek is a public joint stock company that was established in May 2013 by a decree of the President of Kazakhstan and Kazakhstan government order. It is 100 percent owned by Kazakhstan. Baiterek is one of three national management holding companies and acts as the state's quasi-fiscal vehicle, channelling funds from the state to the national economy. Baiterek's institutional mission is to foster Kazakhstan economic diversification and development.
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