The Pakistan Credit Rating Agency Limited
Press Release
a

Rating Action
Lahore: (19-April-2006)
    PACRA Assigns 'A+' Rating to the Proposed Secured TFC Issue of
First International Investment Bank 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 ‘A+’ (Single A plus) to the proposed secured TFC issue of PKR 500mln by First International Investment Bank Limited (Interbank). The rating indicates a low expectation of credit risk and a strong capacity for timely payment of financial commitments.

The rating reflects Interbank’s sustained strong risk absorption capacity, which is primarily an outcome of its conservative stance towards risk supported by an effective credit risk management system. However, at the same time, the bank, due to relatively fine pricing, to ensure good credit quality, and high cost structure, continues to experience subdued profitability. The management, to overcome this impediment and being cognizant of the changing operating environment in the fund-based business, has identified fee-based investment banking activities as main revenue drivers. However, as most of these initiatives are at an initial stage of implementation, any significant impact on revenues and profitability is expected to materialize in the medium-term.

About the bank: First International Investment Bank Limited (Interbank), incorporated in 1990 and listed on Karachi and Lahore Stock Exchanges, is a joint venture of the Packages Group (PG), American Express Bank N.Y. (Amex) and International Finance Corporation, who collectively hold majority of the bank’s equity. The current CEO, Mr. Samir Ahmed, who joined the bank in June 2004, has over 20 years of banking and capital markets experience in various senior management positions both locally and abroad.

About the TFC Issue: Interbank is planning to issue secured listed TFCs of PKR 500mln during the current year. The proposed TFC issue is for a tenor of 5 years carrying a profit rate of 6-months KIBOR plus 225bps. Principal redemption will be in eight equal semi annual installments commencing from the 18th month after the issuance. The instrument will be secured by way of first parri passu charge on present and future assets of the bank with a 25% margin. The bank intends to utilize the proceeds of the TFCs to establish its asset management business, strengthen the brokerage function and further expand the investment portfolio.
 
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