Press Release

VIS Reaffirms Entity Ratings of Pak China Investment Company Limited
 

Karachi, June 28, 2021: VIS Credit Rating Company Limited (VIS) has re-affirmed the entity ratings of Pak China Investment Company Limited (PCICL) at ‘AAA/A-1+’ (Triple A/A-One Plus). The medium to long-term rating of ‘AAA’ denotes highest credit quality, with negligible risk factors, being only slightly more than for risk-free debt of Government of Pakistan (GoP). The short-term rating of ‘A-1+’ denotes highest certainty of timely payment, liquidity factors are outstanding and safety is just below risk-free short-term obligations of GoP. Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on June 25, 2020.

The assigned ratings to PCICL incorporate implicit support of its two sovereign sponsors, GoP and People’s Republic of China (PRC), with equal shareholding held through Ministry of Finance (MoF) and China Development Bank (CDB), respectively. PRC has an outstanding rating of ‘A+’ from an international credit rating agency. In the backdrop of challenging economic conditions and uncertainty posed by pandemic, disbursements were made in a highly cautious manner; the institution plans on following its conservative strategy by tapping listed and rated clients in the medium to long-term horizon.

Overall, asset quality has exhibited slight downturn in line with non-performance of two clients; however, the same is not considered debilitating as the accounts are expected to be adjusted either by rescheduling or repayment by end of ongoing year. The ratings reflect restricted deferment allowed by the institution under central bank’s regulatory relief framework; the deferred portfolio is one of the lowest amongst peers. The ratings are underpinned by strong capitalization, diversified revenue stream, sound liquidity, conservative risk appetite and efforts of the senior management to implement shareholders’ strategic goals and vision. In line with the institution’s mandate, and its role under CPEC, PCICL’s focus also remained on advisory and matchmaking between Chinese and Pakistani industries through JVs and advisory while also exploring the option of debt and equity exposure in high importance sectors thus promoting FDI in Pakistan.

For further information on this rating announcement, please contact Ms. Maham Qasim at 042-35723411-13 (Ext. 8004) and/or the undersigned at 021-35311861-66 (Ext. 306) or email at info@vis.com.pk .


Faryal Ahmad Faheem
Deputy CEO

Applicable rating criterion: Government Supported Entities (July, 2020)
https://www.vis.com.pk/kc-meth.aspx

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Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2021 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

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