The Pakistan Credit Rating Agency Limited
Press Release
a

Rating Action
Lahore: (10-February-2005)
    PACRA Maintains Entity & TFC Ratings of First Dawood Investment Bank Limited
 

 
Analyst
Ambreen Irfan
(+92-42-586 9504)
ambreen@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 plus), and the short-term rating at “A1” (Single A One) of First Dawood Investment Bank Limited (FDIB). These ratings are applicable to senior unsecured creditors and denote a low expectation of credit risk emanating from a strong capacity for timely payment of financial commitments .

The ratings of two tranches of secured TFCs of PKR 253mln and PKR 345mln have also been maintained at “AA-” (Double A minus). This rating denotes a very low expectation of credit risk emanating from a very strong capacity for timely payments of financial commitments.

FDIB's ratings reflect the management's ongoing diversification efforts aimed at making the bank more competitive and less prone to adverse conditions in any one of its business segments. This has helped in improvement in the asset quality. Meanwhile, exposure to volatility risk remains high, an outcome of an increased level of non-strategic investments that are vulnerable to market conditions.

About the TFC Issues: The bank has issued TFCs worth PKR 598mln. The first tranche of PKR 253mln was i ssued in September 2001. It carries interest at 175bps plus the SBP discount rate with a floor of 13.5% and a ceiling of 17.5% payable semi-annually. The second tranche of PKR 345mln was issued in July 2002 at similar rate, but with a floor of 12.25% and a ceiling of 16.25% payable semi-annually. These instruments are of a perpetual nature, and have been issued initially for a tenor of five years till a call and put option is exercised. The TFCs are secured by way of registered charge over all present and future assets and receivables of FDIB with a margin of 20%.

About the bank: Dawood Leasing Company Limited, operating since 1995, was converted into First Dawood Investment Bank (FDIB) in 2004. This was done in order to enable the entity to offer a wide range of financial services. The company has undergone a paradigm shift, with investment banking gradually displacing leasing as the management's core focus with further expansionary plans in the pipeline.

 
 
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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