20000228

Saudi-Pak TFCs

rated D-1+

RECORDER REPORT

KARACHI: DCR-VIS has assigned D-1+ (D one plus) rating to Saudi Pak Industrial and Agricultural Investment Co. Term Finance Certificates worth Rs 300 million.

According to the information released by the credit rating agency, consequent upon an upgrade of Saudi Pak Industrial and Agricultural Co. (PVT) LTD's entity ratings, DCR-VIS reviewed the medium to long term AA rating assigned earlier to its Rs 300 million for three years, Term Finance Certificates (TFCs) issue.

The issue with only the last two instalments maturing within the next one year, has now been assigned the highest short-term rating, D-1+ (D one plus). The rating recognises timely payment of the first four instalments and return on the TFC issue, company's solid balance sheet fundamentals, strong capitalisation and improved asset quality.

The rating also represents Saudi Pak's conservative debt leverage. Additionally, Saudi-Pak possess superior capacity to meet redemption of remaining two TFCs instalments considering its substantial liquid resources along with internally generated funds through recoveries and strong access to money market.

DCR-VIS said that D-1+ means highest certainty of timely payment. Short term liquidity, including internal operating factors and/or access to alternative sources of funds, is outstanding and safety is just below risk-free government of Pakistan's short-term obligations.

The medium to long-term entity rating AA+ (double a plus) means high credit quality. Protection factors are strong. The risk is modest but may vary slightly from time-to-time because of economic conditions.