PACRA ASSIGNS 'AAA' RATING TO

PAKISTAN KUWAIT INVESTMENT COMPANY (PKIC)

 

Lahore: November 21, 2003

The Pakistan Credit Rating Agency (PACRA) has assigned a long-term rating of "AAA" (Triple A) and a short-term rating of A1+ (A One plus) to the Pakistan Kuwait Investment Company (Pvt) Limited (PKIC). These ratings denote the lowest expectation of credit risk emanating from an exceptionally strong capacity for timely payment of financial commitments. The ratings are applicable to the senior unsecured creditors of the company.

The ratings reflect the low risk profile of PKIC's asset portfolio. While PACRA recognizes the volatility risk emanating from a sizeable portfolio of marketable securities, the risk is mitigated by the policy of carrying a stock market fluctuation reserve equivalent to one quarter of the value of the portfolio at cost. Despite the prevailing difficult operating environment that could constrain performance prospects, PKIC, in PACRA's opinion, is well positioned to cope with such unforeseen risks considering its high risk absorption capacity, given the large and continuously expanding equity base. PKIC also draws comfort from the implicit support of the two joint venture partners. Of the two, the Kuwait Investment Authority (KIA) is perceived to be financially very strong being the investment arm of the State of Kuwait, which currently carries an international long-term foreign currency rating of 'AA-'.