Press Release
VIS Finalizes Short Term Sukuk 2 Rating of Pakistan Telecommunication Company Limited
Karachi, May 27, 2024: VIS Credit Rating Company Limited (VIS) had assigned entity ratings of ‘AAA/A-1+’ (Triple A/A One Plus) to Pakistan Telecommunication Company Limited (‘PTCL’ or the ‘Company’). In line with the entity’s short-term rating, VIS has assigned final rating of A-1+ (A-One Plus) to the Company’s Short Term Sukuk-2 (STS-2). Short term rating of 'A-1+' indicates 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. The last rating action was announced on January 16, 2024.
Pakistan Telecommunication Company Limited, initially a state-owned entity, was incorporated as a public limited company on December 31, 1995 taking over the telecommunication business from Pakistan Telecommunication Corporation (PTC) as per the Pakistan Telecommunication (Re-organization) Act 1996. Listed on the Pakistan Stock Exchange Limited (PSX) with headquarter in Islamabad, PTCL provides a wide range of telecommunication services across Pakistan, including Azad Jammu and Kashmir and Gilgit Baltistan. PTCL also has wholly owned subsidiaries, which include Pak Telecom Mobile Limited (PTML) and U-Microfinance Bank Limited. In addition, PTCL is also in the process of acquiring Telenor Pakistan (Private) Limited.
PTCL issued an unsecured STS-2 of PKR 10 bln inclusive of green shoe option of PKR 5 bln. The Sukuk was issued on January 17, 2024. The Sukuk has a Musharakah structure and is based on Shirkat-ul-Aqd for participation in services/trade- based activity of PTCL. Proceeds of the Sukuk are earmarked to meet the working capital requirements. The instrument has tenor of 6 months maturing for repayment in bullet. PTCL however, has option to prepay the Sukuk in full or part at any time on or after three (03) months from the issue date with at least fifteen (15) days’ prior notice. In case of the exercise of the call option, PTCL will pay the outstanding Issue Price allocated to then outstanding Sukuk Certificates along with any declared Profit Payment Amount. The profit rate of the instrument is set at 6M KIBOR + 15 bps. The assigned rating draws comfort from the structure of the Sukuk and adequate financial metrics of the Company.
For further information on this ratings announcement, please contact 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria:
Industrial Corporates
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
Rating the Issue
https://docs.vis.com.pk/docs/Rating-the-Issue-Aug-2023
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf