ASTANA, Kazakhstan, October 11. Fitch Ratings has upgraded Kazakhstan-based Limited Liability Partnership Kazakhstan Utility Systems' (KUS) Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'BB-' from 'B+' with a stable outlook, Trend reports.
The upgrade mainly reflects improved liquidity with better spread of debt maturities following the amended loan agreement with the largest creditor, reduced frequency and size of related-party transactions, and Fitch's expectations that KUS's financial profile will remain strong, with FFO leverage around 2x on average over 2023-2026.
In Fitch's view, the rating continues to incorporate weak corporate governance, the evolving regulatory framework in Kazakhstan, FX risk and overall limited financial flexibility.
Among the main drivers of the rating, Fitch named improving financial flexibility; reduced related-party transactions; low leverage, reasonable coverage; emerging regulation; healthy growth in generation tariffs; long-term distribution tariffs; earnings upside from the capacity market; and vertical Integration; small scale.
KUS is an integrated utility, with operations in electricity generation, distribution and supply across four regions in Kazakhstan, which in total account for 35 percent of the country's population.