Lahore, July 01, 2021 (PPI-OT):GuarantCo Limited, an international Joint Venture development financial institution, is the local currency guarantee arm of the Private Infrastructure Development Group (PIDG). It is directly and indirectly owned by five highly rated sovereigns. Support of the sponsors is evident from time to time in the form of injection of capital. GuarantCo mainly operates in low income, below investment grade countries as per its mandate. Currently, the exposure is in twenty one countries wherein, most of the exposure lies in corporate finance and project finance. There is increased focus towards Asia from Africa evident from enhanced portfolio in South Asian market.
The emerging Asian market is representing above 50% of the portfolio. The current portfolio is skewed towards energy, transport, inputs for infrastructure, telecom and urban infrastructure sectors. Asset quality remains major concern as pressures are building up in key markets due to COVID-19 pandemic. The penetration of COVID-19 pandemic in South Asia especially India, in the last few months, may result in deteriorated performance of the entities. Steady growth has been seen in the gaurantee portfolio along with growth in equity base. The company is eyeing to call available committed callable facility. During CY20, guarantee income recorded slight downtick while other income from portfolio increased. Net income declined YoY in CY20. Liquidity indicators remained in good range.
GuarantCo Management Company, a fully owned subsidiary of Cardano Development, is the fund manager responsible for GuarantCo’s commercial operations. GuarantCo’s ratings are dependent on its robust ownership structure and strong liquidity buffer. Prudent expansion and close monitoring of asset quality and internal obligor rating remains critical.
For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com