Press Release

JCR-VIS Upgrades Ratings of Pak-Gulf Leasing Company Limited to A-/A-2


vermox redirect
Karachi, September 25, 2014: JCR-VIS Credit Rating Company Limited has upgraded the medium to long-term entity rating of Pak Gulf Leasing Company Limited (PGL) from ‘BBB+’ (Triple B Plus) to ‘A-’ (Single A Minus). Short term rating has also been upgraded from ‘A-3’ (A-Three) to ‘A-2’ (A-Two). Outlook on the assigned ratings is ‘Stable’.

The upgrade takes into account consistent growth in asset-base of PGL and the management’s strategy of cautious underwriting which has resulted in steady growth in financing portfolio. Simultaneously infection levels have been brought down considerably by posting recoveries against previously classified exposures. During FY14, the Company changed its funding mix which is now tilted towards short-term running finance and, Certificate of Investments subscribed primarily by sponsors. Resultantly, current ratio has declined but remains above 1(x).

PGL’s leverage and gearing indicators are relatively on the lower side. The company’s equity base has shown improvement on account of internal capital generation. The regulator had initially set Minimum Equity Requirement at Rs. 700m which was to be met by end June 2013. However, reforms are under discussion at the regulatory level to revive the NBFCs sector including extension in timeline for meeting the MER up till 30th June, 2018. Notification from the regulator to that effect is still awaited. Shareholders of PGL have consistently expressed commitment for equity injection once a final decision is made by the regulator in this regard.

For further information on this rating announcement, please contact Ms. Sobia Maqbool, CFA at 021-35311861-70 or Mr. Maimoon Rasheed at 042-36610681-83 or fax to 021-35311872-3.

Abdur Rahim, ACII

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited VIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2014 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.

JCR-VIS Credit Rating Company Limited