VIS Assigns Top Short-Term Rating to PTCL’s Sukuk

Karachi: VIS Credit Rating Company Limited has assigned a short-term rating of 'A-1+' to the Short Term Sukuk IV issued by Pakistan Telecommunication Company Limited (PTCL), indicating the highest certainty of timely payment with exceptional liquidity factors and safety margin just below government short-term obligations.

According to VIS Credit Rating Company Limited, the rating reflects PTCL's robust position in Pakistan’s telecom sector and its substantial government and corporate backing. PTCL, evolving from a state-owned enterprise to a major public entity listed on the Pakistan Stock Exchange, holds a leading role in the nation's telecommunications services, boasting the largest fixed-line network with over 71% market share.

The short-term Sukuk, valued at PKR 5.0 billion and maturing within six months, is intended to support PTCL's working capital needs. It features a profit rate pegged to the 6M KIBOR plus 15 basis points per annum. The issuance, arranged by a prominent commercial bank, underscores PTCL’s strong market dynamics and the strategic interest of its major stakeholders, including the Government of Pakistan with a 62% share and the Etisalat Group of UAE controlling a 26% equity stake.

VIS’s rating also considers PTCL’s strategic acquisitions, including the ongoing process to acquire Telenor Pakistan. This move is seen as a testament to PTCL's expansive strategy and its ability to sustain a leading position amid the telecom industry’s capital-intensive and highly regulated environment which poses a natural barrier to new entrants.