The Pakistan Credit Rating Agency Limited
Press Release
a

Rating Action
Lahore: (15-September-2005)
   

PACRA Assigns ‘AA-’ Rating to the Proposed TFC of Bank Alfalah Limited

 

 
Analyst
Shahzad Saleem
(+92-42-586 9504)
shahzad@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 assigned a rating of AA- (Double A minus) to the proposed unsecured, subordinated term finance certificates issue of PKR 1,500mln by Bank Alfalah Limited. The rating denotes a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments.

The rating reflects the bank’s well-conceived business strategy supported by an effective risk management system, helping the bank to maintain good asset quality despite its high growth mode in recent years. BAL’s strategy encompasses continuing growth in business volumes through providing a wider spectrum of innovative financial products and solutions to an expanding client base. However, this growth is without compromising on the quality of the credit portfolio for which a well-designed, transparent risk management system is in place.

About the issuer - the bank: Bank Alfalah Limited (BAL), since its privatization in 1997, is majority owned by the Abu Dhabi Group. Pursuant to successful offer for sale of 20% shares by some of shareholders, the bank has been listed on the Karachi Stock Exchange in 2004. Bank Alfalah’s business is governed by a low-margin high-volume philosophy. In recent years, the bank has shown aggressive growth in all areas of business including deposit mobilization, credit expansion and geographical outreach. BAL is the fifth largest bank in the country in terms of total assets with a network of 115 branches, including 15 Islamic branches at end-June 05.

About the TFC issue: The proposed unsecured subordinated TFCs would have a tenor of 8 years carrying mark-up at a floating rate of latest 6-month KIBOR plus 1.5%. Major principal redemption will be in three equal semi-annual installments commencing from the 84 th month of the issue.
 
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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