Press Release
VIS Credit Rating Company assigns final rating to Short Term Sukuk (STS-9) of K-Electric Limited
Karachi, September 30, 2022: Upon review of executed legal documents, VIS Credit Rating Company Limited (VIS) has finalized the rating of A-1+ (Single A One Plus) to KE’s (STS-9) issue. 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. Previous rating action was announced on September 19, 2022.
Issue size amounting Rs. 5 billion was issued on September 21, 2022. The STS-8 will have bullet repayment at maturity and will have a tenor of 6 months i.e. maturity date falling on March 21, 2023. The proceeds of the issue will be utilized for KE’s working capital requirements.
VIS has an outstanding entity rating of ‘AA/A-1+’ (Double A/A One Plus) assigned to KE. 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. 306) at 92-21-35311861-70 or fax to 92-21-35311873.
Faryal Ahmad Faheem
Deputy CEO
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