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The Pakistan Credit Rating Agency Limited
Press Release

Date
28-Apr-20

Analyst
Jibran Cheema
jibran.cheema@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

FINCA Microfinance Bank Limited redeems PPTFC of PKR 500mln | Rating Withdrawn

Issuer FINCA Microfinance Bank Limited
Instrument PPTFC
Amount PKR 500 mln
Issuance Date 02-Nov-17
Tenor 5 Years
Redemption Date 02-Nov-19
Outstanding Amount -

Rating Type Debt Instrument
Current
(28-Apr-20)
Previous
(29-Oct-19)
Action Redeem Maintain
Long Term - A
Short Term - -
Outlook Stable
Rating Watch - -

FINCA Microfinance Bank Ltd. ("FINCA") had in issue a Privately Placed Term Finance Certificate (PPTFC) of PKR 500mln, with a total value of PKR 1,500mln. First and only tranche of PKR 500mln was issued in November 2017. No further tranche was issued afterwards. The PPTFC of PKR 500mln was fully redeemed by FINCA in November 2019. The PPTFC was assigned an 'A' rating by PACRA.
Subsequent to the completion of the redemption process, PACRA withdraws the rating of the PPTFC with immediate effect.

About the Entity
Kashf Holdings (Pvt.) Ltd. established the bank in 2008. In 2013, FINCA International acquired majority ownership in the bank, through dilution of Kashf Holdings' shareholding. FINCA International has a majority stake of ~86.4%, through FINCA Microfinance Cooperatief U.A; a commercial arm registered in Holland. Kashf Holdings (Pvt) Ltd. holds a ~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) Acumen Fund Pakistan (~0.8%). FINCA, offers a diversified range of financial products and services. The bank operates with a network of ~130 branches. In Sep'19, Mr. Farid Ahmad Khan replaced Mr. Mudassar Aqil as the acting CEO of the bank. Mr. Farid is a seasoned professional, having more than 25 years of global experience in financial services. Previously, he was associated with the asset management wing of a leading commercial bank in Pakistan. Before joining as Chief Executive, he remained a part of the Board of Directors of FINCA, for the past 3 years.

About the Instrument
FINCA had issued a PPTFC of PKR 500mln, with a total value of PKR 1.5bln. First and only tranche of PKR 500mln was issued in November 2017. The instrument had a tenor of 5 years from first installment and was to be redeemed in 16 equal quarterly installments starting from 15th month of the first draw-down. Profit was paid quarterly at a mark-up of 3 months KIBOR + 1.50%. The instrument was secured against first pari passu charge over all future and present current assets along with 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.