PACRA REAFFIRMS TFC RATINGS OF

ATLAS INVESTMENT BANK LIMITED

 

Lahore: September 30, 2002

The Pakistan Credit Rating Agency (PACRA) has reaffirmed the ratings of both secured TFC tranches of Rs.200mln and Rs.100mln of Atlas Investment Bank Limited (AIBL) at 'A' (Single A). These ratings denote a low expectation of credit risk.

Atlas Lease Limited (ALL) had issued TFCs of a principal value of Rs.200mln and Rs.100mln in October 2000 and August 2001, respectively. Consequent to the approval of the scheme of arrangement by the Sindh High Court, dated February 06, 2002, ALL was amalgamated with Atlas Investment Bank Limited (AIBL), effective July 01, 2001, and all TFC obligations were vested in AIBL. AIBL has ceased to be the security agent and its responsibilities have been transferred to the trustee - Crescent Investment Bank Limited.

Both TFCs are of a five-year tenor with redemption of principal due in six half yearly instalments commencing April 2003 and February 2004 for the first and second tranche, respectively. The TFCs are secured by a first pari passu charge on leased assets and related receivables with a security margin of 30% on the principal value of TFCs.

The asset size of the amalgamated entity has increased by over two thirds in relation to ALL. Meanwhile, the financial charge coverage has registered some improvement during the nine months ended March 31, 2002 without any material change in the gearing level. Going forward, business prospects for the amalgamated entity are expected to improve, with consequential improvement in performance on the back of greater operational synergy and a wider range of services.