Fitch Ratings-London/Moscow-14 October 2010: Fitch Ratings has today maintained the 'C' Long-term Issuer Default Rating (IDR) of Astana Finance Leasing JSC (AFL) on Rating Watch Negative (RWN), reflecting the high probability that the company's obligations will soon be subject to a coercive debt exchange. A full list of rating actions is provided at the end of this commentary. AFL's Long-term IDR was downgraded to 'C' and placed on RWN on 20 May 2009 following the announcement of default by its parent, JSC Astana Finance (AF, rated 'RD'). Based on information provided by AF's management, Fitch understands that AFL has so far continued to service its third party debt, and the agency has therefore not downgraded AFL to 'RD'. Fitch has also been informed that none of AF's creditors have approached AFL with claims in respect to the guarantees which AFL provided on AF's borrowings. At the same time, Fitch notes that since the announcement of default by AF, AFL has not been servicing its borrowings from the parent (which comprised 71% of AFL's total funding base at end-H110), due to a standstill arrangement on all intra-group settlements. AF made a debt restructuring proposal to its international and domestic creditors in September 2010 and, according to AF's management, this proposal stipulates that AFL's third party obligations will be subject to restructuring alongside those of AF. Should such a coercive debt exchange take place, AFL will be downgraded to 'RD'. Fitch has not had access to the full restructuring proposal made by AF to its creditors, and has been able to review only the limited publicly available information on the proposal placed on the company's internet site. AF is a Kazakhstan-based non-bank financial institution headquartered in the capital, Astana. At present, the state-owned National Welfare Fund, Samruk-Kazyna, controls a 39.75% in AF. AFL is wholly owned by AF and was set up in 2005 to book the group's leasing business. The rating actions on AFL are as follows: Long-term foreign currency IDR: 'C', RWN maintained Short-term foreign currency IDR: 'C', RWN maintained Long-term local currency IDR: 'C', RWN maintained Support rating: affirmed at '5' National Long-term rating: 'C(kaz)', RWN maintained AF's ratings are as follows: Long-term foreign currency IDR: 'RD' Short-term foreign currency IDR: 'RD' Long-term local currency IDR: 'RD' Individual rating: 'F' Support rating: '5' Support rating floor: 'NF' National Long-term rating: 'RD(kaz)'