VIS Affirms High Rating for PTCL’s Short Term Sukuk-2

Karachi, VIS Credit Rating Company Limited has affirmed a high short-term rating of A-1+ for Pakistan Telecommunication Company Limited's (PTCL) Short Term Sukuk-2, issued earlier this year. This rating reflects PTCL's robust financial health and reliability in meeting financial commitments promptly, emphasizing the company's stable liquidity and strong operational standing.

According to VIS Credit Rating Company Limited, the A-1+ rating, updated from the last rating action on January 16, 2024, is given to instruments showing the highest certainty of timely payment and excellent short-term liquidity. PTCL’s financial and operational stability, coupled with access to alternative funding sources, positions it just below the risk-free short-term obligations of the Government of Pakistan.

PTCL, which transformed from a state-owned entity to a public corporation in 1995, plays a significant role in Pakistan's telecommunication sector. It offers a broad range of services across Pakistan, including in Azad Jammu and Kashmir and Gilgit Baltistan. The company is in the process of expanding its portfolio by acquiring Telenor Pakistan. This strategic move, along with its ownership of subsidiaries like Pak Telecom Mobile Limited and U-Microfinance Bank Limited, underscores PTCL's substantial footprint in the industry.

The Short Term Sukuk-2, valued at PKR 10 billion with an additional green shoe option of PKR 5 billion, was issued on January 17, 2024. It is structured on a Musharakah basis, involving shared business activities, and is intended to support PTCL’s working capital needs. The Sukuk features a six-month tenure with flexible prepayment options starting three months post-issue, reflecting PTCL’s operational flexibility and strong market position. The profit rate is set competitively at 6M KIBOR plus 15 basis points, indicating the investment's attractiveness and PTCL’s robust market stance.