Press Release
JCR-VIS Reaffirms Ratings of First Paramount Modaraba at BBB/A-3
Karachi, December 28, 2018: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed entity ratings of First Paramount Modaraba (FPM) at ‘BBB/A-3’ (Triple B/A-Three). Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on December 29, 2017.
Financing portfolio (net of deferred income) of FPM slightly reduced during FY18. Largest chunk of the portfolio is contributed by murabaha financing; business mix is expected to remain the same going forward. Despite concentration in the financing portfolio, a single exposure does not exceed more than 10% of its equity base. Nonetheless, quality of the financing portfolio must be maintained in order to ensure sustainability and growth in earnings. Infection levels of the company continue to remain low.
Despite a lower financing base, revenue base of the company increased on the back of proceeds from its in-house petrochemicals venture. Going forward, management projects its in-house ventures to continue supporting its profitability levels.
FPM only mobilizes funds through Certificate of Musharaka (CoMs). The company plans to gradually mobilize CoMs over the coming years. In order to fund growth of its financing portfolio, management also plans to inject approximately half of its paid up capital as equity during FY18; developments in this regard are yet to materialize. The modaraba’s ability to maintain portfolio quality indicators and improve profitability while maintaining leverage within prudent limits will continue to be monitored by JCR-VIS.
For further information on this rating announcement, please contact the undersigned (Ext: 207) or Mr. Javed Callea (Ext: 201) at 021-35311861-71 or fax to 021-35311872-3.
Jamal Abbas Zaidi
Advisor
Applicable Rating Criteria: Modaraba Rating Scale (October 2002)
http://www.jcrvis.com.pk/images/JCR-Mod.pdf