Karachi, In a significant development for Pakistan's telecommunication sector, VIS Credit Rating Company Limited has assigned a top-tier preliminary rating of 'A-1+' to Pakistan Telecommunication Company Limited's (PTCL) upcoming Short-Term Sukuk III (STS-III), amounting to PKR 5.0 billion. This rating reflects a high level of certainty regarding timely payment and outstanding liquidity, positioning the issuance just below the government's risk-free short-term securities.

According to VIS Credit Rating Company Limited, this favorable rating underscores PTCL's robust standing in the telecommunications industry and its strategic importance within Pakistan's economic framework. PTCL, which transitioned from a state-run entity to a public limited company in 1995, has since expanded its service offerings across Pakistan, including the regions of Azad Jammu and Kashmir and Gilgit Baltistan. With significant government ownership and strategic partnership with Etisalat Group, PTCL enjoys a commanding market presence and strong financial stability.

The proposed STS-III, set to be a rated, unsecured, privately placed instrument based on Shariah principles, aims to support PTCL's working capital requirements with a maturity of up to six months. This issuance is part of PTCL's broader strategy to leverage its market position and financial health to sustain and expand its operations, reflecting the company's proactive approach to financial management.

VIS's rating also reflects the medium business risk profile of the telecommunications sector, characterized by its essential services that exhibit low sensitivity to economic fluctuations and robust barriers against new market entrants. PTCL's market leadership, backed by a comprehensive network infrastructure and a substantial market share, further bolsters the company's rating.

Moreover, the strategic shareholding composition of PTCL, with significant stakes held by the Government of Pakistan and the Etisalat Group, enhances the company's profile. The financial prowess and management expertise of the Etisalat Group, acknowledged by global rating agencies, contribute positively to PTCL's operational and financial outlook.

As PTCL gears up to issue the STS-III, this rating not only highlights the company's financial robustness but also signifies the broader potential and stability of Pakistan's telecommunication sector.