S&P lifts Kazakh Agrarian Credit from junk

Standard & Poor's said it raised its long-term issuer credit rating on the Kazakh Agrarian Credit Corp. to BBB- from BB+, along with its short-term issuer credit rating to A-3 from B and the kzAA Kazakhstan national-scale rating was affirmed.

The outlook is stable.

The upgrade follows the recent rating action on the Republic of Kazakhstan (foreign currency BBB/stable/A-3 local currency BBB+/stable/A-2), S&P said.

The ratings are supported by the strong government support that the company, which is 100% state-owned, receives in the form of capital injections secured until 2009 due to its public policy-based mandate of providing credit to rural mutual credit associations throughout Kazakhstan.

The ratings are constrained, however, due to Kazakh Agrarian's customers operating in the risky agricultural sector. Rapid expansion of the company's loan portfolio in a currently sound macroeconomic environment, which leaves the business model untested, also constrains the ratings, the agency said.

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