S&P has upgraded DBK rating to the sovereign “BBB - /A-3”, the outlook is Stable

International rating agency S&P Global Ratings raised long- and short-term credit ratings of the Development Bank of Kazakhstan on liabilities in foreign and local currency to the sovereign “BBB-/A-3”,the outlook is Stable. The Bank’s national scale rating was also upgraded to “kzAAA” and its senior unsecured bond rating to “BBB-”.

Стандарт и Пурс

The rating change is due to improvements in the last four years in monitoring of the upcoming payments on the debt obligations of government-related entities (hereinafter – GREs) by the government, including the creation of special commission to monitor the external debt of GREs.

According to the agency, the Bank’s objectives are to contribute to the development of Kazakhstan’s economy through investment in priority non-energy sectors, which is closely related to the overall strategy of Baiterek Holding.

Analysts at S&P Global Ratings emphasize that while DBK is focused on the objectives of public policy, rather than profit, the Bank strives to provide sufficient profit to cover operating costs and the cost of raised funding. Thus, over the last 5 years the Bank’s activity has been profitable, the return on equity ratio has averaged 2.3%.

“Improving the credit rating to the sovereign level is a kind of confirmation of the Bank’s financial stability, a clear indicator that today DBK is considered as a stable and successful development finance institution of the country. Our international investors and partners trust us allowing the Bank to successfully place Eurobonds with growing demands,” said Dmitry Babichev, Deputy Chairman of the Management Board for Financial Management.

Дмитрий Бабичев

To remind, the Development Bank is the only Kazakh issuer who successfully placed Eurobonds denominated in KZT four times: in December 2017, in April 2018, in February 2020 and in May 2021. This is evidence of the high confidence of foreign investors in Kazakhstan and its development institutions.

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