ASTANA, Kazakhstan, February 16. Fitch Ratings has assigned Kazakhstan's Kazpost JSC (KP) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) of 'BBB-' with a stable outlook, Trend reports.
Fitch views support from Kazakhstan for KP as 'Extremely Likely', which yields a support score of 40 out of a maximum of 60 under our Government-Related Entities (GRE) Criteria. The support score is a combination of our assessments of the responsibility to support and the incentive to support.
Thus, the Kazakh government fully owns KP through the Sovereign Wealth Fund Samruk-Kazyna JSC (SK; BBB/Stable) and is a key decision-maker for KP. The state exercises tight control both directly by setting availability and quality requirements for universal postal services and indirectly via SK representatives on KP's board of directors.
KP receives sustainable state support via subsidies and capital injections from SK. Annual subsidies averaged 3.1 billion tenge (about $6.9 million) in 2018–2022, which constituted 5.7 percent of operating revenue.
In addition, Fitch views a KP default as having only a limited impact on Kazakhstan's or other national GREs' borrowing capacity. This is primarily due to its modest borrowing relative to other national GREs and the structure of its debt portfolio. SK holds KP's only bond issue, while lease financing comes from JSC Industrial Development Fund, another state-related company.
Fitch believes that a KP default would not negatively affect investors' views of the credit quality of other GREs and, hence, their cost of funding.
Meanwhile, KP is the national postal operator and the sole provider of universal postal services in Kazakhstan. In addition to traditional postal services, it also provides financial services, which include social payments and pension deliveries, throughout more than 2700 postal offices located across the country.