Press Release
VIS Credit Rating Company assigns rating to proposed Short Term Sukuk (STS-9) of K-Electric Limited
Karachi, September 19, 2022: VIS Credit Rating Company Limited (VIS) has an outstanding entity ratings of ‘AA/A-1+’ (Double A/A One Plus) to K-Electric Limited (KE). In lieu of the same, VIS has assigned preliminary rating of A-1+ (Single A One Plus) to KE’s proposed Short Term Sukuk (STS-9). Short-term rating of A-1+ reflects 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.
KE plans to issue an unsecured, privately placed STS (STS-9) issue of up to Rs. 5 billion. The instrument will have bullet repayment at maturity and will have a tenor of 6 months. The proceeds of the issue will be utilized for KE’s working capital requirements.
The assigned rating to the issuer recognize the strategic importance of KE, a vertically integrated utility Company, that has exclusive distribution rights in its service area i.e. Karachi and adjoining areas of Sindh and Balochistan. Business risk profile draws support from growing demand for electricity and continuous improvement across various operational metrics. Revenues & profitability indicators have depicted improvement post Covid-19 revival in overall economy. Continuity in improvement in various operational performance metrics is considered important from a ratings perspective.
For further information on this rating announcement, please contact the undersigned or Ms. Asfia Aziz (Ext: 212) or the undersigned (Ext. 207) at 92-21-35311861-70 or fax to 92-21-35311873.
Sara Ahmed
Director
Applicable Rating Criteria: Industrial Corporate (August 2021)
https://docs.vis.com.pk/docs/CorporateMethodology202108.pdf
Rating The Issue (July 2020)
https://docs.vis.com.pk/docs/Notchingtheissue202007.pdf