OREANDA-NEWS. On October 25, 2007 Standard & Poor's Ratings Services said it assigned its 'BBB-' senior unsecured debt rating to Development Bank of Kazakhstan's (DBK; BBB-/Stable/A-3) upcoming $2 billion EMTN program, reported the press-centre of KASE.

The ratings on DBK reflect the bank's strong financial profile, and its clearly defined and strategic public policy role assigned by the government of the Republic of Kazakhstan (foreign currency BBB-/Stable/A-3; local currency BBB/Stable/A-3; Kazakhstan national scale kzAAA). Strong sovereign support is also ensured by DBK's ownership structure: The state wholly owns Kazyna, its sustainable development fund, which in turn wholly owns and manages DBK.

DBK is the primary vehicle for providing long-term credit to the nonextractive sectors of the Kazakh economy, and the expansion of these sectors is one of the main strategic development aims of the government.

The sovereign does not guarantee DBK's obligations, although it keeps the bank well capitalized relative to the size of its business. In 2007, the government reaffirmed its support for the bank by increasing DBK's paid-in capital to Kazakhstani tenge (KZT) 90,9 billion ($758 million) from KZT70,6 billion in 2006. The government is expected to increase DBK's capital to about KZT132.5 billion in 2008.

The increases in DBK's capital are an integral part of the second stage of the government's 2004-2015 strategic program for industrial and innovation development.

Loan commitments have increased and diversified significantly since the inception of the bank. Nonetheless, the bank is expected to expand its loan portfolio prudently in a high-risk market environment and to continue to adhere to conservative policies on leverage ratios.

Standard & Poor's does not expect any changes in the policy and regulatory framework that would weaken the bank's key policy role in the government's development plans. Nevertheless, a deviation from DBK's policy role, or signs of weakening government support, would result in downward pressure on the ratings.