The Pakistan Credit Rating Agency Limited
Press Release
a

Rating Action
Lahore: (26-April-2005)
   

PACRA Maintains Entity and TFC Ratings of Jahangir Siddiqui & Company 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 maintained the long-term and short-term entity ratings of Jahangir Siddiqui & Co. Ltd at “AA+” (Double A plus) and “A1+” (A one plus), respectively. These ratings are applicable to senior unsecured creditors of the company. The ratings of the two unsecured listed TFC issues of PKR 500mln each are also maintained at “AA+” (Double A plus). These ratings denote a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments.

The ratings reflect the sound capital structure of the company, which, supplemented by a highly liquid profile of assets, has engendered a very strong risk absorption capacity. Although JSCL's earnings are exposed to volatility due to sizable exposure to the stock market, the management has demonstrated its ability to manage the vulnerability. The ratings also recognize the efficacy of the company's strategy, which is directed towards adding stable and diversified sources of revenue.

About the Company: Jahangir Siddiqui & Co. Ltd., a listed company, was established in 1991. Starting as a traditional securities firm, JSCL is now acquiring the character of a holding company. With its considerably expanded equity and asset base, the company is embarked upon new initiatives while retaining its status as the flagship company of the Jahangir Siddiqui Group. Meanwhile, the group itself continues to expand and diversify with a dynamic approach in identifying new growth opportunities with the proven ability to take quick but prudent investment decisions.

About the TFC Instruments: JSCL issued its first unsecured TFC in April 2003 for a tenor of five years at a floating rate of 5-year PIB yield plus 150bps payable semi-annually with a floor and cap of 7.5% and 13.0% per annum. The principal redemption will begin after a grace period of forty-two months in 4 equal semi-annual installments. The issue includes a call option exercisable anytime after the first 6 months at 3 months notice at a premium of 1.0% on the outstanding face value. The second unsecured TFC was issued during December 2004 for a tenor of 5 years carrying fixed profit of 8.29% payable semi-annually. The major portion of principal would be paid in two semi-annual installments beginning 54 th month after the issue. A call option is exercisable from 30 th month till 54 th month at a premium of 1.0% of the then outstanding principal.

 
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.