Press Release

JCR-VIS Upgrades Fund Stability Rating of United Islamic Income Fund to BBB(f)

Karachi, April 25, 2013: JCR-VIS Credit Rating Company Limited (JCR-VIS) has upgraded the Fund Stability Rating (FSR) of United Islamic Income Fund (UIIF) to ‘BBB(f)’ (Triple B (f)) from ‘BB+(f)’ (Double B Plus (f)).

The rating incorporates reduction in exposure of the fund in assets with weak credit risk profile on account of significant provisions booked against the same and restructuring of a proportion of these assets. Moreover, fund size has also witnessed an increase in Mar’13 to Rs. 472m which further diluted the proportion of restructured assets in the fund. Fresh investments by the fund have been in exposures rated in the A band or higher. Magnitude of volatility in NAV of the fund may vary from low to moderate and is linked to the repayment behavior of restructured assets (comprising less than 10% of net assets) and pricing of corporate debt instruments.

As an Aggressive Islamic Income Fund, regulations allow UIIF to invest in a wide range of avenues across the credit risk spectrum; furthermore, weighted average maturity of the fund’s assets can go up to five years (condition not applicable to government securities). Price risk is primarily expected to arise from tradable corporate income instruments on account of limited price continuity in secondary market for these instruments; the same comprised 26% of total assets at end-Mar’13. Moreover, GOP Ijarah Sukuks held by the fund, comprising 34% of total assets are not marked to market; the NAV may not reflect the true market value of these investments. Concentration in investor profile is considered on the higher side; stability in UBL’s investment in the fund has provided liquidity cushion to the fund to manage redemption pressure in the past.

For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 501) or Ms. Sobia Maqbool, CFA (Ext: 604) at 021-35311861-70 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 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 2013 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