Press Release
JCR-VIS Reaffirms Capital Protected Fund Rating of UBL Capital Protected Fund I
Karachi, December 27, 2010: JCR-VIS Credit Rating Company Limited has reaffirmed the Capital Protected Fund (CPF) Rating of UBL Capital Protected Fund-I (UCPF-I) at ‘AA+(cpf)’ (Double A Plus (cpf)). The rating reflects very high probability of timely repayment of principal investment.
UCPF-I was launched in April 2008 as a closed-end fund with a life of three years (maturity: April 15, 2011). Capital protection segment primarily comprises fixed-return TDR with United Bank Limited (UBL) and a smaller amount placed with another bank. The segment also includes investment in government securities to the extent of 13% of net assets. These collectively represented 83% of net assets at the end of September 2010 and return thereon is expected to enable the fund to meet its objective of principal protection at maturity. Credit risk arising from these exposures is considered low.
On account of equity investments, the NAV is exposed to volatility over the life of the fund. In relation to its stated benchmark, the fund underperformed in FY10 but outperformed in the first quarter of FY11. However, this does not compromise the ability of the fund to ensure capital protection at maturity.
The fund has limited liquidity considerations since it is structured as closed-end. Nonetheless, equity investments may require some time for liquidation in order to avoid impact cost at the time of maturity.
For further information on this rating announcement, please contact Ms. Sabeen Saleem, CFA (Ext: 510) or Ms. Sobia Maqbool, CFA (Ext: 506) at 35311861-70 or fax to 35311872.
Faheem Ahmad
President & CEO