Fitch Ratings has affirmed the long-term issuer default rating (IDR) of JSC Social-Entrepreneurial Corporation Almaty (SEC Almaty) at ‘BBB-‘ with a stable outlook, according to a statement released on March 4, 2023. The rating applies to both foreign and local currency obligations.
The affirmation reflects Fitch’s expectation of “Extremely Likely” extraordinary support from the City of Almaty, which holds a ‘BBB/Stable’ rating, due to SEC Almaty’s close ties with the city and its role as a development institution. Fitch assigns SEC Almaty a support score of 35 points under its Government-Related Entities (GRE) rating criteria.
According to Fitch, a key factor supporting the rating is the assumption that SEC Almaty’s liabilities would be transferred to the city or another government body in the event of liquidation. What we have is based on the city of Almaty’s 100 percent ownership of SEC Almaty shares and consistent financial support for the corporation’s activities and programs.
In 2022, SEC Almaty received 4 billion Kazakh tenge (approximately $9.27 million USD) for the implementation of Almaty’s food security program and to stabilize prices of socially important food products. Further funding of 61.4 billion Kazakh tenge ($142.39 million USD) was allocated to support a housing renovation program, and an additional 6.3 billion Kazakh tenge ($14.61 million USD) was provided for small and medium enterprise (SME) support.
Fitch Ratings assesses that a default by SEC Almaty would negatively impact the reputation of the local government, minimizing the perceived risks. The rating agency notes its role in providing business intelligence to facilitate decision-making and reduce business risks for its clients.
Contact for media inquiries regarding SEC Almaty’s activities is Temirlan Nikhamбаев at [email protected] or +7 (727) 225-18-91 ext. 503.
