The Pakistan Credit Rating Agency Limited
Press Release


Madiha Sohail

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PACRA Maintains Rating of Byco Petroleum Pakistan Limited | Sukuk | Jan-17

Rating Type Debt Instrument
(29-Nov-20 )
(29-Nov-19 )
Action Maintain Maintain
Long Term AAA AAA
Short Term - -
Outlook Stable Stable
Rating Watch - -

The rating reflects unconditional and irrevocable credit guarantee available to Sukuk holders from a multilateral guarantor - GuarantCo. Limited, rated AAA (June’19) by PACRA. The guarantee covers 100% of the issue amount (principal). The issuer maintains and efficiently manages 'Debt Service Reserve Account' (DSRA) under lien of the Security Trustee whereby the installments (Principal plus Profit) are being made regularly, prior to the due date. The issuer ensures (a) an amount equivalent to two upcoming Rental payments (profit only) is maintained in the DSRA at all times during the tenor of the Sukuk Issue, and (b) each Redemption amount (principal), is deposited in the DSRA 55 days prior to the relevant Redemption Date.
In case the issuer is unable to fund the installment on the funding date, a 30 day cure period will be given to the issuer. Simultaneously, the guarantor will be informed. If DSRA is not replenished in the stipulated time, the trustee will call the guarantee to settle the total outstanding principal amount. In any case, the guarantor would ensure that the requisite amount is filled in DSRA, not later than 5 business days before the due date. Meanwhile, profit would be settled through already held rental payment. During the current period, the issuer has deferred payment of principal installments for one year under SBP’s directive. Deferment of principal repayment for one year has been approved by the guarantor, GuarantCo. Limited.

About the Entity
Byco Petroleum Pakistan Limited was incorporated in Jan’95 as a public limited company. The company is engaged in oil refining and petroleum marketing business. The total capacity of the refinery is 155,000 bpd which constitutes ~40% of the country’s refining capacity. During FY17, Byco Terminals Pakistan Limited (wholly owned subsidiary) and Byco Oil Pakistan Limited (Parent Company) was merged into Byco Petroleum Pakistan Limited. Post-merger, Byco was the first company to have its own liquid port. The merged entity is now a direct subsidiary of Byco Industries Incorporated (BII), Mauritius (the parent company), which holds 91.83% shares in the company.

About the Guarantor:
GuarantCo Limited was incorporated in 2006. The company has executed forty-seven projects with exposure in seventeen countries to date. The ultimate ownership of GuarantCo lies with five governments, four of which (United Kingdom, Sweden, Switzerland, and Australia) own through Private Infrastructure Development Group (PIDG), and one (Netherlands) maintains its stake through FMO (a Dutch development bank). GuarantCo is rated 'AAA' by PACRA and Bloomfield Investment, 'AA-' by Fitch, and 'A1' by Moody's.

About the Instrument
BPPL issued a privately-placed Sukuk of PKR 3,120mln in Jan’17. The Sukuk, having an original tenor of 5 years (including a 2 year grace period), has quarterly coupon payments payable at 3-month KIBOR plus 1.05%. After the deferment of principal for one year, the tenor has now stretched to 6 years. Redemption of the Sukuk is scheduled in twelve equal quarterly installments starting from Apr’19 and ending on Jan’23. The instrument is secured by a ranking charge over all the present and future fixed assets of the issuer, with a 25% margin.

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.