"We have taken this step of moving Kazakhstan down by one rating but we still keep it within the 'investment' grade,” Faulks said.
Nonetheless, while “"slightly less creditworthy" than before, Kazakhstan is "still relatively safe" to lend to, according to Faulks. The companies include the Kazakhstan Development Bank, postal and financial-services firm KazPochta, and Agrarian Credit Corporation. Moreover, with their fortunes so closely tied to the country’s overall economy, Kazakhstan’s main wholly state-owned firms have also seen their ratings downgraded. And the Kazakh credit crunch could end up sending an economic shockwave across Central Asia. mortgage scare has already raised the global cost of credit, but the downgrade is likely to make it even more expensive for Astana to borrow. Now, Kazakhstan appears set for a double credit blow. According to the "Financial Times," Kazakh banks' international borrowings total $40 billion - more than half of their total non-equity funding. To further accelerate growth, the country borrowed heavily on international capital markets when loans were relatively cheap. The Kazakh economy has grown at an annual rate of nearly 10 percent in recent years - mostly due to oil revenues.
“What you have had in Kazakhstan is that the rate of increase of the borrowing of the banks has been really exceptionally fast - much faster than in most countries." "Kazakhstan's case is arguably more extreme than most,” Ben Faulks, a London-based S&P sovereign-ratings analyst, told RFE/RL. mortgage crisis shook world capital markets last summer. With the downgrade, Kazakhstan has become the only country so far to see its S&P rating fall since major turbulence over the U.S. S&P blamed the downgrade on a rapid rate of borrowing by Kazakh banks, citing signs of an economic slowdown and potential obstacles to new borrowing due in part to the U.S. On October 8, the international ratings agency Standard and Poor's (S&P) downgraded Astana’s sovereign credit rating to BBB-, the lowest investment grade category, due to funding problems in the country’s financial system.
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