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The Pakistan Credit Rating Agency Limited
Press Release

Date
29-Oct-19

Analyst
Muhammad Usman
muhammad.usman@pacra.com
+92-42-35869504
www.pacra.com

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This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Withdraws Debt Instrument Rating of FINCA Microfinance Bank Limited | PPTFC Tier II

Rating Type Debt Instrument
Current
(29-Oct-19 )
Previous
(29-Apr-19 )
Action Withdraw Preliminary
Long Term - A-
Short Term - -
Outlook - Stable
Rating Watch - -

The company proposed to raise its second Term Finance Certificate, a Privately Placed, Unsecured, Subordinated instrument, in the nature of Additional Tier II Capital, with an amount of PKR 1.5bln (including green shoe option of PKR 500 million). The instrument had a tenure of 7 years from the date of disbursement, with a profit rate of 6M-KIBOR+ 2.40%.
FINCA does not intend to issue the instrument, thereby PACRA withdraws PPTFC Tier II Rating, assigned 'A-' with immediate effect.

About the Entity
FINCA Microfinance Bank commenced its operations in 2013 and operates with a network of 135 branches. The bank is majorly owned by FINCA International (86.4%), through FINCA Microfinance Cooperatief U.A; a commercial arm registered in Holland. Kashf Holdings holds ~5.2% stake in the bank. The remaining stake is distributed among i) International Finance Corporation (4.9%), ii) Triodos Fair share fund (2.7%) and iii) Accumen Fund Pakistan (0.8%). FINCA, offers a diversified range of financial products and services. In Sep'19, Mr. Farid Ahmad Khan replaced Mr. Mudassar Aqil as the CEO of the bank. Mr. Farid is a seasoned professional, having 25 years of global experience in financial services. Before joining FINCA, he was associated with the asset management wing of a leading commercial bank in Pakistan.

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 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.