Moody's assigns rating to Kazakhstan’s forthcoming Eurobonds at 'Bаа3'
/Moody's Investors Service, Singapore, September 19, 2019, translation and heading 
by KASE/ – has assigned a rating of Baa3 to the proposed senior unsecured, euro-
denominated notes to be issued by the Government of Kazakhstan under its 
multicurrency USD10 billion medium-term note programme. The notes will rank pari 
passu with all of the Government of Kazakhstan's current and future senior 
unsecured external debt. The proceeds of the notes are intended for general 
budgetary purposes.

The rating mirrors the Government of Kazakhstan's long-term issuer rating of Baa3 
with a positive outlook.

Below is the original text of Moody's statement in English.

Moody's Investors Service ("Moody's") has assigned a rating of Baa3 to the 
proposed senior unsecured, euro-denominated notes to be issued by the Government 
of Kazakhstan under its multicurrency USD10 billion medium-term note programme. 
The notes will rank pari passu with all of the Government of Kazakhstan's current 
and future senior unsecured external debt. The proceeds of the notes are intended 
for general budgetary purposes.

The rating mirrors the Government of Kazakhstan's long-term issuer rating of Baa3 
with a positive outlook.

RATINGS RATIONALE

Kazakhstan's Baa3 rating is supported by a very low level of public debt, very 
high debt affordability, and sizeable fiscal reserves held in foreign-currency 
assets, which provide a significant buffer against external shocks. These credit
strengths are balanced by the country's relatively limited economic diversification,  
low – albeit improving – institutional strength, ongoing banking sector fragilities  
and longer-term political transition risks.

The outlook on Kazakhstan's rating is positive. The positive outlook reflects 
Moody's assessment that economic resilience in Kazakhstan is increasing, supported 
by robust growth prospects in both hydrocarbon and non-hydrocarbon sectors, and 
rising incomes. Prospects for further economic reforms, combined with prudent and 
effective management of fiscal buffers, indicate that Kazakhstan's credit metrics 
may strengthen further to be consistent with a higher rating.

WHAT COULD MOVE THE RATING UP/DOWN

The rating would likely be upgraded if ongoing and further reforms were to 
strengthen the institutional framework, policy credibility and effectiveness,
and economic competitiveness beyond Moody's current expectations. In particular,  
reforms that materially advance economic diversification would enhance the 
economy's resilience to potential shocks. Moreover, a material reduction in 
banking sector risks, supported by prospects of a sustained improvement in banking 
system health, more effective credit intermediation, and enhancements to the 
sector's regulation and supervision would likely put upward pressure on the rating.

The positive outlook signals that a rating downgrade is unlikely over the near 
term. The outlook would likely be changed to stable if the potential for a 
significant and long-lasting deterioration in Kazakhstan's economic and fiscal 
metrics were to become likely, possibly stemming from a large, negative oil
price shock that the government were unable to cushion. Reemergence of domestic
political risks, with a negative impact on the government's reform agenda and
the business environment, would also likely put downward pressure on the rating.

This credit rating and any associated review or outlook has been assigned on an 
anticipated/subsequent basis. Please see the most recent credit rating announcement 
posted on the issuer's page on www.moodys.com, under the research tab, for related 
economic statistics included in rating announcements published after June 3, 2013.

This credit rating and any associated review or outlook has been assigned on an 
anticipated/subsequent basis. Please see the most recent credit rating announcement 
posted on the issuer's page on www.moodys.com, under the research tab, for related 
summary rating committee minutes included in rating announcements published after 
June 3, 2013.

The principal methodology used in these ratings was Sovereign Bond Ratings 
published in November 2018. Please see the Rating Methodologies page on 
www.moodys.com for a copy of this methodology.

The weighting of all rating factors is described in the methodology used in this
credit rating action, if applicable.

REGULATORY DISCLOSURES

For ratings issued on a program, series, category/class of debt or security this
announcement provides certain regulatory disclosures in relation to each rating 
of a subsequently issued bond or note of the same series, category/class of debt,  
security or pursuant to a program for which the ratings are derived exclusively  
from existing ratings in accordance with Moody's rating practices. For ratings  
issued on a support provider, this announcement provides certain regulatory 
disclosures in relation to the credit rating action on the support provider and 
in  relation to each particular credit rating action for securities that derive 
their credit  ratings from the support provider's credit rating. For provisional 
ratings, this  announcement provides certain regulatory disclosures in relation 
to the  provisional rating assigned, and in relation to a definitive rating that 
may be  assigned subsequent to the final issuance of the debt, in each case where 
the  transaction structure and terms have not changed prior to the assignment of 
the  definitive rating in a manner that would have affected the rating. For 
further  information please see the ratings tab on the issuer/entity page for the 
respective  issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support 
from the primary entity(ies) of this credit rating action, and whose ratings
may change  as a result of this credit rating action, the associated regulatory
disclosures will  be those of the guarantor entity. Exceptions to this approach
exist for the  following disclosures, if applicable to jurisdiction: Ancillary
Services, Disclosure to  rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating  
and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst 
and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for 
additional regulatory disclosures for each credit rating.

* Full version of the press release is posted on Moody's website.

[2019-09-20]