The Pakistan Credit Rating Agency Limited
28-Apr-20
Analyst
Jibran Cheema
jibran.cheema@pacra.com
+92-42-35869504
www.pacra.com
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FINCA Microfinance Bank Limited redeems PPTFC of PKR 500mln | Rating Withdrawn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.