The Pakistan Credit Rating Agency Limited
Press Release
a

Rating Action
Lahore: (18-July-2006)
    PACRA Maintains Entity Ratings of
House Building Finance Corporation (HBFC)
 

 
Analyst
Moin Khalid
(+92-42-586 9504)
moin@pacra.com

 

 

 









 

 





 

 

 

 

 

 

Disclaimer
This press release is transmitted to you for this sole purpose of dissemination through your newspaper/magazine/agency. The press release may be used by you in full or in part without changing the meaning or context thereof but with due credit to PACRA. However, PACRA has the sole right of distribution of its press releases for consideration or otherwise through any media.

  

The Pakistan Credit Rating Agency (PACRA) has maintained the long-term rating at “A” (Single A) and the short-term rating at “A1” (A One) of House Building Finance Corporation (HBFC). These ratings denote a low expectation of credit risk emanating from a strong capacity for timely payment of financial commitments.

HBFC’s ratings reflect the Corporation’s sound equity base signifying high-risk absorption capacity and strong underlying security against loans. While in the medium-term, the Corporation will continue to retain strong capacity to service its obligations, the long-term sustainability of operations is faced with a degree of uncertainty, on account of continued repayments of SBP’s credit lines. Considering the significance of HBFC’s pivotal role in GoP’s commitment in expanding the housing stock in the country, the government is likely to provide adequate financial support for continued operations through rescheduling of these lines, for which negotiations are already in hand. The outcome of these negotiations will remain critical for future prospects of the Corporation.

About the Corporation: The House Building Finance Corporation (HBFC) was established in 1952 under the HBFC Act, to provide financial facilities for the construction, re-construction, repair and purchase of houses, particularly to the low and middle-income groups of the economy. The Government of Pakistan (GOP) and the State Bank of Pakistan (SBP) jointly hold the share capital of the Corporation.

The general direction and administration of the Corporation and its affairs is vested in the Board of Directors appointed by the GOP. HBFC has a large network of 60 offices spanning across the country, managed through 12 zones with headquarters at Karachi.

Unlike other financial institutions engaged in housing finance, the bulk of the loan disbursements of HBFC are to low-income group, and for construction of house, as against outright purchase and renovation. Under its new mission, the HBFC aims to be the housing bank for Small & Medium Housing (SMH) finance.

 
 
The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity.

PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings.

PACRA's opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.

 

    
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