Press Release

JCR-VIS Reaffirms Ratings of Pak-Gulf Leasing Company Limited at A-/A-2


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Karachi, November 27, 2015: JCR-VIS Credit Rating Company Limited has reaffirmed the entity rating of Pak Gulf Leasing Company Limited (PGLC) at ‘A-/A-2’ (Single A Minus/A-Two). Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on September 25, 2014.

The assigned ratings to PGLC incorporate sound asset quality indicators, growing profitability levels and adequate liquidity profile. Capitalization levels of the Company have grown over time on account of profit retention while gearing and leverage indicators have been maintained at adequate levels. Ratings also reflect Company’s steady performance in the backdrop of challenging operating environment for privately-sponsored leasing companies facing limited growth, reduction in the rate of initial depreciation, application of Alternate Corporate Tax regime and high cost of funding for working capital needs.

Net lease portfolio of the Company increased by 15% during FY15 with most of the growth witnessed in the last quarter, as has been observed in the past. The Company follows a prudent disbursement strategy, which revolves around adding fresh creditworthy lessees every year, in addition to generating additional business from clients with sound repayment history. Consequently, infection in the portfolio has been maintained at a negligible level.

Cash recoveries of the Company are sufficient to meet operating expenses and finance cost with excess cash along with additional borrowings being used to fund disbursements. While management expects debt levels to increase to fund planned growth in leasing portfolio, leverage indicators are expected to remain within manageable levels given current capitalization levels and assuming continuity in profit retention in future.

For further information on this rating announcement, please contact the undersigned at 021-35311861 (Ext-517) or Mr. Javed Callea (Ext-501) at 021-35311861 or fax to 021-35311872-3.

Jamal Abbas Zaidi
Deputy CEO

Applicable Rating Criteria: Non-Bank Financial Companies

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 2015 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