Karachi: VIS Credit Rating Company Limited has finalized a short-term rating of 'A1+' for Pakistan Telecommunication Company Limited's (PTCL) Short Term Sukuk XI (STS-XI). This rating indicates the strongest likelihood of timely repayment for short-term obligations, supported by strong liquidity factors. PTCL's entity ratings remain at 'AAA/A1+' with a stable outlook, following the last rating action on March 12, 2025.

PTCL, a public limited company listed on the Pakistan Stock Exchange, was established in 1995, transitioning from the Pakistan Telecommunication Corporation. Headquartered in Islamabad, PTCL offers a range of telecommunication services nationwide, including areas like Azad Jammu and Kashmir and Gilgit Baltistan. The company has subsidiaries, such as Pak Telecom Mobile Limited and U-Microfinance Bank Limited, and is in the process of acquiring Telenor Pakistan (Private) Limited.

The STS-XI, a privately placed unsecured Sukuk aligned with Shariah principles, amounts to PKR 5 billion. Issued on March 19, 2025, with a maturity of up to six months, the Sukuk's proceeds aim to support PTCL's working capital needs. The profit rate is set at 3 Month KIBOR plus 0.05%.

The telecom sector's medium business risk profile bolsters the assigned ratings, characterized by low cyclical sensitivity and inflationary impact. The sector's capital-intensive technological advancements and regulatory framework create high entry barriers for new players.

PTCL's strategic market position as a leading Integrated Information Communication Technology Company and its extensive fixed-line network further underpin the ratings. The company's strong sponsor profile, with the Government of Pakistan holding 62% and Etisalat Group of UAE managing 26% equity, adds to the financial stability. Etisalat Group's financial standing is affirmed by its AA- and Aa3 ratings from S and P and Moody's, respectively.