OREANDA-NEWS. Fitch Ratings has affirmed Limited Liability Partnership Kazakhstan Utility Systems' (KUS) Long-Term Foreign and Local Currency Issuer Default Ratings (IDR) at 'BB-' with Stable Outlooks. The agency has also assigned a local currency senior unsecured rating of 'BB-' to the domestic bond programme of KZT12.3bn and the KZT100m bonds issued under it. A full list of rating actions is at the end of this commentary.

The affirmation reflects KUS's solid credit metrics and Fitch's expectations that the company will maintain a strong financial profile over 2016-2019, despite dividend payments starting from 2017 and high capex. The company's strong 1H16 financial and operational results, stable regional market share, vertical integration, benign regulatory regime in distribution segment at present and absence of FX exposure are also supportive. KUS's ratings are constrained by its limited size relative to larger peers and 'BB' rated CIS companies, unfavourable regulatory framework in generation segment and limitations in corporate governance.