OREANDA-NEWS. September 29, 2010. Moody's Investors Service has confirmed the corporate family rating (CFR) and probability of default rating (PDR) of JSC National Company Food Contract Corporation ("FCC") at Ba3. Today's rating action concludes the review on the company's rating initiated on 7 April 2010. At the same time, Moody's assigned a (P)Ba3 rating to the KZT22 billion senior unsecured bonds the company is planning to issue. The outlook on the company's CFR is stable, reported the press-centre of KASE.

RATINGS RATIONALE
                                   
Moody's Investors Service has today confirmed the corporate family rating and probability of default rating of JSC National Company Food Contract Corporation at Ba3.

By virtue of its current ownership structure (100% owned by the Government of Kazakhstan via Kazagro), FCC is considered a government-related issuer (GRI). Thus, in accordance with Moody's GRI rating methodology, the ratings of FCC and of the proposed notes incorporate uplift from FCC's standalone credit  quality measured by a Baseline Credit Assessment (BCA) of 16 (on a scale of 1 to 21 and equivalent to B3). The uplift to the BCA is driven by the credit quality of the state, as the sole shareholder, and Moody's assessment of strong support from its ultimate shareholder in the event of financial distress, as well as high default dependence between the company and the state.

The rating conformation reflects the fact that the Government of Kazakhstan fulfilled its commitmentto makean equity contribution into the company's capital in full which has helped to buffer the capital structure. In addition, Moody's concerns with breached financial covenants under certain bank facilities are now alleviated with the repayment of such facilities in August 2010. At present FCC has reportedly no financial covenants.