The Pakistan Credit Rating Agency Limited
Press Release
a

Rating Action
Lahore: (12-May-2005)
   

PACRA Maintains Entity and TFC Ratings of WorldCALL Communications 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 WorldCALL Communications Limited (WCL) at "A+" (single A plus) and "A1" (A one), respectively. These ratings, applicable to the senior unsecured creditors of the company, denote a low expectation of credit risk

The rating of secured TFC of PKR 350 mln has been maintained at "AA-" (double A minus). This rating denotes a very low expectation of credit risk and very strong capacity for timely payment of financial commitments.

The ratings reflect WCL's continuing strong financial risk profile emanating from stable cash flow generation and sound coverages. At the same time, the ratings also take into account the emerging landscape of the telecommunication sector that is characterized by intense competition. Although WCL's core margins are expected to remain under competitive pressure, the company, due to synergic benefits of WorldCALL group's recent diversification in WLL and LDI businesses, is potentially well positioned to cope with the competition.

About the company: WCL, incorporated in 1995, is the flagship company of WorldCALL/First Capital group in the telecommunication sector. The principal activities of the company include a countrywide payphone network and pre-paid calling card services. WCL is diversifying locally as well as internationally into various value-added telecom services through its associated and subsidiary companies and has earned recognition for its brand name.

About the TFC issue: WCL issued secured TFCs of PKR 350mln during September 2002 for a tenor of 5 years. The profit payment is based on SBP discount rate plus 175bps with a floor of 12.25% and a cap of 16.25%. Principal redemption is in seven equal semi-annual installments commencing September 2004 (current outstanding principal: PKR 300mln). The instrument is secured by a first pari passu hypothecation charge of PKR 437.5mln on the present and future fixed assets of the company.
 
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.