Press Release
VIS Upgrades Bank Loan Rating of Elite Estates (Pvt.) Limited
Karachi, June 25 , 2020: VIS Credit Rating Company Limited (VIS) has upgraded the bank loan rating (blr) of Elite Estates (Pvt.) Limited’s (EEPL) Rs. 3.0b bank loan facility to ‘BBB+’ (Triple B Plus) from ‘BBB-’ (Triple B minus). Long term entity rating of ‘BBB+’ reflects adequate credit quality; protection factors are reasonable and sufficient. Risk factors are considered variable if changes occur in the economy. The facility is obtained to fund the construction and development of residential and commercial venture ‘Eighteen’ located near Islamabad. The previous rating action was announced on 12th June, 2018.
The rating assigned to EEPL draws comfort from the sound sponsors’ profile coupled with relevant expertise in the industry. Quality of amenities planned and in place is expected to bode well for future sales. Business risk profile draws support from the sizeable land bank available with the Company, revenue collection from it has started from the sale of both residential and commercial units. Further, given phase one of the project is almost nearing completion, the implementation and completion risk has been subsided. It may be noted that this is a bank loan rating whereby security structure of a particular loan is critical; VIS considers security structure to be comfortable with the presence of debt payment account. The ratings will remain dependent on timely completion of the project without any significant cost and time overruns while maintaining healthy sales velocity and collection efficiency, as projected, will remain critical to avoid cash flow mismatches.
For further information on this rating announcement, please contact Ms. Maham Qasim (042-35723411-13, Ext. 8005) and/or the undersigned at 021-35311861-66 (Ext. 201) or email at info@vis.com.pk
Faryal Ahmed Faheem
Deputy CEO
Applicable Rating Criterion: Real Estate Developers (August 2017)
https://www.vis.com.pk/kc-meth.aspx