The Pakistan Credit Rating Agency Limited
Press Release
a

Rating Action
Lahore: (30-September-2004)
    PACRA Assigns AA+ Rating to the Proposed TFC Issue 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 assigned a rating of “AA+” (Double A plus) to the proposed unsecured term finance certificates issue of PKR 500mln by Jahangir Siddiqui & Co. Ltd. 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 strong risk absorption capacity of the Jahangir Siddiqui & Co. Ltd. emanating from a sound capital structure. This is further augmented by highly liquid profile of the assets. The rating also recognizes the efficacy of the company's business strategy and prudence of risk management policies which are directed at maintaining asset quality while ensuring sustainability of performance. However, a sizeable exposure to the stock market makes future earnings vulnerable to volatility to some extent.

About the issuer – the company: Jahangir Siddiqui & Co. Ltd. (JSCL), a listed company, was established in 1991 and the present principal shareholders include Ali Jehangir Siddiqui and Dallah Albaraka (UK) Ltd. 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. The subsidiary companies of JSCL include ABAMCO Limited, Jahangir Siddiqui Investment Bank Limited and Jahangir Siddiqui Capital Markets Ltd.; while BSJS Balanced Fund Limited is an associated company.

About the issue: The proposed unsecured TFC issue of PKR 500mln is a fixed rate instrument for a tenor of 5 years carrying profit to be set at the time of issuance for the tenor at the rate of 5-year PIB yield plus 190bps payable semi-annually. The major portion of principal would be paid in two semi-annual installments beginning 54th 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.