Baku, Azerbaijan, Sept. 13
By Ali Mustafayev – Trend:
Fitch Ratings has upgraded KazTransGas and its Subsidiaries in its rating list to 'BBB-' from 'BB+' with the Stable Outlook.
The upgrade of KTG is mainly caused by a strong support in the form of regulated tariff increases by its parent, JSC National Company KazMunayGas.
KTG's great share in NC KMG's actual and a number of projected funds from operations and financial assistance also spurred the development of the entity.
NC KMG is in a dominant position in national gas transportation and distribution industry, which has its influence on KTG’s authority. KTG's IDR is currently one notch below that of Kazakhstan (BBB/Stable).
The rating alignment reflects an increase in regulated gas transportation tariffs and regulated gas sales prices in 2017, which support KTG's earnings following the drop in ICA's gas transit volumes.
The state and NC KMG are expected to continue regulating KTG's financial profile such as to allow KTG to generate significant operating cash flow and maintain moderate leverage. KaztransGas, Integras Central Asia and KazTransGas Aimak are ultimately fully state-owned through NC KMG.
KTG and its fully owned subsidiaries, ICA JSC's and KTG Aimak JSC's continue to strengthen their positions in Kazakhstan’s gas transportation and distribution industry and the recent upgrade is expected to remain stable, foreseeing the company’s further development in the international rating lists.