Karachi, December 06, 2022 (PPI-OT):VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Primus Leasing Limited (PLL) at ‘A+/A-1’ (Single A Plus/A-One). Long-term rating of ‘A+’ denotes good credit quality and adequate protection factors; risk factors may vary with possible changes in the economy. Short-term rating of “A-1” denotes high certainty of timely payment, excellent liquidity factors supported by good fundamental protection factors. Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on December 16, 2021.
Rating assigned to PLL reflect its strong sponsor strength (Pak Brunei Investment Company Limited rated at ‘AA+/A-1+’ by VIS), sound asset quality indicators with negligible infection, continuous growth in lease and loan portfolios, improvement in efficiency in line with higher average ticket size and overall enhancement of profitability metrics. The overall lease portfolio exhibits diversification in terms of sectoral composition. The company also has a service level agreement in place with the holding company for provision of all core functions and particularly for risk management and internal audit which is noted and reflected in the ratings.
The ratings derive comfort from implicit financial support extended by the holding company with provision of short-term interest-bearing funding line during the rating review period to assist the company in its growth phase; the line although short-term in nature is expected to be enhanced and to remain vested in the company in the medium term. The company was also able to successfully access the commercial borrowings avenue during the ongoing year to fund the growth momentum. In addition, PLL also has an arrangement for the transfer/sale of loan/ lease rental receivables to the holding company in case the need arises for liquidity support.
The ratings also factor in the sound governance levels supported by presence of two independent directors on the Board, adequate board level committees in place and experienced management team. Continuation of portfolio growth while keeping the asset quality in check will remain imperative for ratings going forward. In line with prevailing economic and political uncertainty in the country coupled with lack luster NBFC environment, the materialization of targets seems challenging; the same will be vigilantly monitored by VIS.
For more information, contact:
Director Compliance and Rating Analytics,
VIS Credit Rating Company Limited
VIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi, Pakistan
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: bilal@jcrvis.com.pk
Website: https://www.vis.com.pk/