BAKU, Azerbaijan, October 27. Moody’s Ratings has upgraded the corporate family rating of Kazakhstan’s state-owned grain trader National Company Food Contract Corp JSC (FCC) to B1 from B2, citing improved operating cash flow, lower debt, and more conservative financial policies, according to the agency.
The outlook remains positive. The company’s probability of default rating was also upgraded to B1-PD from B2-PD, while its baseline credit assessment (BCA) was raised to b3 from caa1.
“The rating action reflects FCC’s material improvement in operating cash flow and leverage in 2025 after several years of very weak financial performance. The recovery resulted from stronger governance, including a shift to more conservative operating and financial policies, and the government’s implementation of long-discussed support measures,” Moody’s said.
The positive outlook reflects the potential for further improvement if FCC sustains its conservative policies, maintains sound liquidity and continues to receive government support, the agency said.
FCC’s operating performance has historically been volatile due to agricultural sector cyclicality and its role as the regulator of Kazakhstan’s grain market. These factors, combined with aggressive operating and financial policies shaped by government objectives, weakened the company’s credit quality in 2021-2024 and left its capital structure unsustainable, according to Moody’s.
Since the second half of 2024, FCC has pursued a more conservative operating policy under a new state-backed funding framework designed to improve the stability and commercial viability of its trading operations. The government approved the gradual replacement of short-term commercial borrowings with subsidized financing.
The government also allocated 70 billion tenge ($155.2 million) in new equity to restore working capital for the 2024-2025 grain procurement plan, including 40 billion tenge ($88.7 million) in 2024 and 30 billion tenge ($66.5 million) in 2025. In addition, transportation subsidies were introduced for grain exports in 2025-2026, with plans to extend them into 2027.
FCC also accelerated the release of its large accumulated grain inventories. Higher grain sales, the settlement of trade credits and the receipt of state subsidies lifted cash flow from operations (CFO) to 73 billion tenge ($161.8 million) in 2025, returning it to a strongly positive level for the first time since 2018.
FCC used this operating cash flow, together with proceeds from maturing financial investments, to repay expensive foreign-currency commercial loans. These repayments reduced Moody’s-adjusted debt by around 30% in 2025, while lower debt and a shift to subsidized domestic bonds almost halved interest expenses.
As a result, FCC’s Moody’s-adjusted debt-to-EBITDA ratio improved to 6.1 times in 2025, following negative EBITDA in 2023-2024. Its net debt-to-EBITDA ratio was close to zero because of the company’s substantial cash balance.
Moody’s expects FCC’s adjusted debt-to-EBITDA ratio to remain below 4.0 times for full-year 2026, including 2.9 times for the 12 months ended June 2026, as earnings normalize. The agency also expects the company to move into a net cash position.
FCC’s earnings and profitability in 2026-2027 will remain sensitive to grain price fluctuations and dependent on the availability of subsidies to offset high transportation costs. However, Moody’s expects cash flow from operations to remain positive because grain sales will exceed purchases, supporting further debt repayment.
FCC aims to repay almost all its debt in 2027 and fund grain purchases mainly from internal resources, using subsidized debt only moderately. Moody’s said that a lighter balance sheet and substantial grain stocks would strengthen FCC’s ability to absorb earnings and cash-flow volatility caused by market cyclicality, government-mandated interventions and seasonality. However, deleveraging would mitigate, but not eliminate, these structural risks.
Moody’s also noted that FCC has yet to demonstrate sustained adherence to conservative operating and financial policies throughout market cycles, including periods of market distress. The new state support mechanism has yet to demonstrate consistency in providing timely financial assistance and sufficient compensation for government-mandated interventions.
FCC’s BCA also reflects its status as Kazakhstan’s state grain trader and its strategic role in food security and grain-market development, its track record of direct state financial support, and its sound liquidity. The company’s liquidity is supported by access to financing secured against substantial grain reserves and by committed bank facilities.
Moody’s classifies FCC as a government-related issuer because it is owned by the Government of Kazakhstan, which has a Baa1 rating with a stable outlook. Under the agency’s methodology, FCC’s B1 corporate family rating reflects its B3 BCA, the government’s Baa1 rating, a strong probability of state support in the event of financial distress, and moderate default dependence between FCC and the government.
The tenge-to-dollar conversions are based on the official exchange rate of $1 = 451.05 tenge set by the National Bank of Kazakhstan as of October 27, 2026.
