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Moody's downgrades rating on Kazakhstan-based Kecic to Baa2 following action on the Government of Kazakhstan

May 20, 2009 | Cbonds

Outlook is negative

London, 18 May 2009 -- Moody's has downgraded the insurer financial
strength rating on the Kazakhstan-based State Insurance Company for
Export Credit and Investment (Kecic) to Baa2 from Baa1 and assigned a
negative outlook. This rating action follows Moody's downgrade on the
ratings of the Government of Kazakhstan to Baa2 on the 12th May 2009

Kecic's Baa2 insurance financial strength rating (IFSR) reflects its very
strong capitalisation, good investment policy and 100% ownership by the
Republic of Kazakhstan. With the vast majority of its investments being
in Kazakhstan government debt, with relatively limited amounts of other
local currency deposits, bonds and shares, Moody's expects Kecic's rating
to be limited by the rating on the Government of Kazakhstan. The negative
outlook therefore mirrors the negative outlook on the ratings of the
Government of Kazakhstan

The downgrade on the ratings of the Government of Kazakhstan was driven
principally by continuing fragility in the Kazakh banking system because
of its large short-term foreign currency debt obligations. The downgrade
also took into account the weaknesses inherent in a macro-economy that
depends heavily on the export of commodities whose prices have collapsed
sharply.

Kecic reported gross written premiums of 255 million Tenge (US$ 2
million) in the year to 31st December 2008, and a profit after tax of 267
million Tenge. With total equity of 7,902 million Tenge Moody's regards
Kecic as extremely well capitalized in relation to the premium written.
More negatively Kecic has sizeable commercial credit and political risk
exposures to Kazakhstan and its main trading partners, such as China,
Russia, Iran and the Central Asian countries. In addition, the Kazakh
insurance market is expected to be increasingly competitive over time.

The last rating action was on 11th August 2006, when the rating was
upgraded to Baa1

The following ratings were downgraded and placed on negative outlook:



State Insurance Company for Export Credity and Investment (Kecic)

Insurance Financial Strength to Baa2 from Baa1

The principal methodology used in rating Kecic is "Moody's Global Rating
Methodology for Property and Casualty Insurers", which can be found at
www.moodys.com in the Credit Policy & Methodologies directory, in the
Ratings Methodologies subdirectory. Other methodologies and factors that
may have been considered in the process of rating these issuers can also
be found in the Credit Policy & Methodologies directory.

Kecic, headquartered in Almaty, Kazakhstan, had total assets of Tenge
9,383 million and total equity of Tenge 7,902 million as of the 31st of
December 2008 (on an IFRS basis).

Company: KEG

Full company nameJoint Stock Company "Export Insurance Company "KazakhExport"
Country of riskKazakhstan
Country of registrationKazakhstan
IndustryFinancial institutions

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