The Pakistan Credit Rating Agency Limited
Press Release
a

Rating Action
Lahore: (30-January-2006)
    PACRA Assigns Rating of AA- (double A minus) to the Proposed PKR 4bln TFC Issue by MOBILINK (Pakistan Mobile Communications Limited)
 

 
Analyst
Muhammad Usman Majeed
(+92-42-586 9504)
usman@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 an instrument rating of “AA-” (double A minus) to the proposed listed secured TFC issue of PKR 4bln (inclusive of a green shoe option of PKR 1bln) by Pakistan Mobile Communications Limited (Mobilink). 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 Mobilink’s sustained market leadership and strong financial performance emanating from continuing growth in volumes. Though the increase in financial leverage owing to continuing debt acquisition for supporting expansion has been substantial, the corresponding increase in cash flows allows the company to maintain gearing and respective coverages at an adequate level. The rating also incorporates the company’s success in sustaining its positioning in an increasingly competitive cellular industry despite some negative publicity on the quality of service.

About the company: Mobilink, a part of the Orascom Telecom Group, is Pakistan’s largest cellular telecommunication service provider, with more than half of the total market share. Mobilink’s parent company, Orascom Telecom (OT), has grown to become a leading mobile telecommunication company in seven emerging markets across the Middle East, Africa and South Asia. In addition to GSM operations, Orascom Telecom has other subsidiaries in the areas of Internet and satellite technologies.

About the TFC Issue: The company plans to issue listed secured TFCs of PKR 4bln (inclusive of a green shoe option of PKR 1bln). The IPO amount is PKR 800mln. The proposed issue has a tenor of seven years, principal being payable after a grace period of four years in six equal semi-annual installments. The issue has been secured by way of first parri passu charges on two pools of assets with 25% margin. The first pool comprises present and future receivables and collections, and the second comprises present and future movable fixed assets of the company. The TFCs carry a coupon rate of 6 months KIBOR+ 285bps, with no floor or ceiling, being payable on a semi-annual basis in arrears.
 
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