pacra rating scale

This rating mainly covers leasing companies, housing finance companies, and investment finance companies. Adobe PDF Library 11.0 Welcome to the FFIEC Interagency CRA Rating Search. h�L�A Hence, the primary rating considerations for evolving a The Pakistan Credit Rating Agency Limited Rating Report Report Contents MCB Islamic Bank Limited Dissemination Date 26-Dec-2018 29-Jun-2018 16-Oct-2017 01-Feb-2017 01-Feb-2016 Long Term Rating A A A A A Rating History Short Term Rating A1 A1 A1 A1 A1 1. NBFCs, include the companies offering leasing, investment finance services, housing finance, venture capital, discounting, investment advisory, and asset management companies. PACRA then goes on to incorporate the unique characteristics of the instrument being rated into its analysis. �5L�'OQ��)�77�-r��|>��0��i�1m�7��2-��4�~��r�~n��b��Y�ul��Y�DL�$�$�lRL��Q�(b1�E�"F��Q�(b5�E��FQ��2�~8��(�:��Q��>>? The protection may be from day one or at maturity depending upon the risk appetite of the fund. While preference share rating is done in the same manner as any other instrument rating, a critical element is the assessment of the individual features of an issue to determine the degree of protection it offers to the investors versus issuers. No one factor has an overriding importance or is considered in isolation and all the factors are reviewed in conjunction. The Pakistan Credit Rating Agency Limited DFIs Profile Structure Pakistan Mortgage Refinance Company - PMRC (or the Company) is a public unlisted company. ICRA’s Issuer Rating Scale An Issuer Rating is an opinion on the general creditworthiness of the rated issuer and is not specific to any particular debt instrument. The ownership and management structure of PACRA ensures complete independence from any direct or indirect control of the Government, any private sector business group or financial institution. Rating Scale 4. According to PACRA vide their press release dated 25th September 2020, the FHM was assigned a rating scale of AA+ for long-term and A1+ for short term. 66 0 obj <>stream Since ratings depict the risk to investor, the more protection the terms offer for the investor, the higher will be the rating. Owing to pending notification of Multi Year Tariff (MYT) for the period from July 2016 onward, the company from time to time has obtained extension from SECP for holding AGM for 2017 and 2018. Rating Scale … There is a difference between the two types and PACRA Sukuk rating methodology has a separate criteria for each. Microfinance institutions are organizations that provide loans to low-income clients, including micro-companies and the self-employed, who traditionally lack access to mainstream sources of finance from Banking Institutions. Analyzing the profile of the NBFC includes comprehensive coverage of a wide range of factors that are categorized under these key areas: Profile, Ownership, Governance, Management, Business Risk and Financial Risk. It then goes on to incorporate the unique characteristics of the instrument into its analysis. LT Rating ST Rating AAA A1+ AA+ AA AA- A+ A + A- A BBB+ BBB BBB- A3 BB+ BB BB- A4 B+ B B- C+ C C- D D A1 A2 A3+ A4+ 2+ Reflects the ‘typical mapping’ of the long-term rating with the short-term rating Reflects the mapping when there is a reason for assigning a higher or a Ratings is assigned to theses components on the scale of 1 to 5 and that is a base for composite rating that also ranged from 1 to 5. The need for credit rating systems is underscored by the fact that usually more than 70% of PACRA’s ratings for corporate entities are based on a mix of qualitative and quantitative factors, which are: Profile, Ownership, Governance, Management, Business Risk and Financial Risk. The ratings reflect PSO’s very strong capital structure, sustained robust performance and improved cash flows. PACRA issues ratings for both short-term and long-term debt instruments. ٽ�S�M��K,�>"��3)�I�T0v�N�b�Ar#I�Ю S�B3�$W��ܴ��LY`�)ɎZY��rZ0nSh�(V��f. Holding companies are entities whose primary activity is holding controlling and non-controlling stakes in private or publicly traded companies, for the purpose of generating capital gains and/or dividend income. H��޾��@�iQ4Й I˖�B��6! These could be in form of studies, reviews, update or snapshots. PACRA’s credit ratings reflects forward-looking opinion on credit worthiness of underlying entity or instrument; more specifically it covers relative ability to honor financial obligations. IPPs are special purpose companies and in Pakistan, they operate in a regulatory environment, insulating them from multiple business and financial risks. Neither all factors can be quantified nor do quantitative values portray the whole story. The relevant positioning of the broker, established in comparison with relative peers in the industry, is a key consideration to reach a final rating for a broker. The question of achieving objectivity is answered by the quantitative factors while the qualitative factors help in establishing the sustainability of the relevant factors in the foreseeable future. 2021-01-14T10:16:35+05:00 PACRA bases its analysis of brokers on a number of quantitative and qualitative factors. PACRA evaluates i) Profile, ii) Ownership, iii) Governance, iv) Management, vi) Investment Risk Management vi) Portfolio Management and vii) Customer Relationship. PACRA’s rating analysis cover a number of quantitative and qualitative factors, the most significant of which are: Profile, Ownership, Governance, Management, Business Risk and Financial Risk. endstream endobj 68 0 obj <>stream The rating captures the relative degree of certainty of capital protection; it does not comment on the relative performance of these schemes in terms of returns offered to investors. The rating denotes an adequate organization that meets investment management industry standards and benchmarks. Each of the factors depicted above encompass a number of sub-factors necessary for formulating the grading opinion. Rating Scale 4. The rating scale values range from 5-Star to 1-Star ranking Superior to Weak performers in the descending order. The rating methodology for this specific rating highlight the salient criteria of Tier I and Tier II debt instruments that are considered crucial while forming a view on the rating. {�M�� a�l��0�%M!7H�P��(H�ǱX��H��6i The primary factor being captured on the rating scale is relative likelihood of default. The insurer financial strength (IFS) rating represents an opinion of an issuer's financial strength and business continuity from a policy holder's prospective. Colquitt (2007) asserts that internal credit risk rating systems have become the cornerstone to managing a range of credit functions and now also serve as a framework for management credit decisions in banking institutions. Overall, PACRA has a more favorable opinion on insurance companies which have a strong ERM, relative position, persistency, underwriting performance, investment, liquidity and reinsurance arrangements. This is determined by evaluating investment Performance in terms of Assets Under Management and Financial Sustainability. The Project Grading (PG) is an opinion on a specific project being managed by any real estate entity. Analyzing the profile of the MFI includes comprehensive coverage of both quantitative and qualitative factors. The risk assessment process for Microfinance Institutions comprises comprehensive analysis of the particular segment in which it operates, profile of the MFI, and its relative position in its respective segment. The Pakistan Credit Rating Agency Limited Rating Report Report Contents The Hub Power Company Limited | PP Sukuk Dissemination Date 05-Jul-2019 Long Term Rating AA+ Rating History Short Term Rating - 1. PACRA’s approach to rating of various types of Sukuk is different. The analysis is based on multiple factors including Ownership, Governance, Management etc. The need for a separate framework for rating of holding companies arises to account for the unique risks emanating from their investment portfolios and its impact on their credit quality. A tremendous increase in deposits and overwhelming profits of approximately Rs. The primary purpose of PACRA’s Asset Manager Rating is to provide users with an independent opinion on the quality and expertise deployed by an asset management company and potential vulnerability to investment management and operational challenges. The opinion is not specific to any particular insurance policy or contract. It provides an initial screening criterion to investors. Security (secured, unsecured or subordinated). uuid:704e5019-2675-44c8-b801-4a3f9bac1e7c July 2, 2019 (MLN): Pakistan Credit Rating Agency has maintained the entity ratings of K-Electric Limited at ‘AA’ for long-term and ‘A1+’ for short-term. All these are testament to our expertise, exceptional command, market leadership, and the confidence reposed in our opinions. In determining the level of risk, a diverse range of complex data is collected and analyzed. PACRA also publishes a variety of other relative opinions, ratings, grading and rankings that relate to financial or operational strength of entities, instruments, funds, security brokers, asset managers, real estate projects and many more. Scale ± Credit Rating The Pakistan Credit Rating Agency Limited June 2020 Disclaimer: PACRA has used due care in preparation of this document. Key Types of Debt Instruments: %PDF-1.6 %�� The nature of the unique underlying assets along with their associated cash flows using a data heavy approach is taken into consideration, followed by analysis of the payment and recovery risk. ), markets in which they are issued (conventional vs. Islamic), accessibility (listed vs. privately-placed). Factors classified as modifiers capture an AMC’s progress and achievements using its design and against its objectives. The Sukuks are either asset-based (also known as “issuer backed” Sukuk and asset-backed Sukuk. application/pdf Rating Analysis 2. As per PACRA’s assessment, these ratings reflect First Habib Modaraba’s strong business profile emanating from healthy asset base, sound asset quality and sustained profitability. h��UMo�0�+��%Y�l�(�v�i�6@�ic�V��S��f'rvx�,~��^kB0�E0��rho��Xt/��y�~Y�_��]��>/��z��O�}׿�N�o�Ͱ�~^n�-0��vx�t��ƀK{��wo�_�m�ؼ��|߭��÷k�/��, ��l��ӢOh$4F+8��툴ޔ�D�MUEy^9'E�uC�8G[��|��7@��PP;)��L�!%�Q�KL��y�v�I��FE�� {K#��9��Н�-��!t$�u When rating short-term debt instruments, PACRA additionally considers the liquidity and financial flexibility of the issuer. U#O�t(k�h�z��u�Y>'��.ݓ��O��Y�f��N��ȹ9��r GM}�� Financial Information 3. !D� � �%"��Z'��{E�~xP ��0A=�';�J^$2� 0cNz � a PACRA has numerous rating products, and publishes opinions on a variety of scales. The magnitude and relevance of risks vary for IPPs at different stages in their lifecycle. Rating Analysis 2. Preference shares is a hybrid instrument with both debt and equity-like characteristics. The outlook on the assigned ratings is stable. PACRA undertakes the Credit Ratings of Financial institutions (FI), regulated by State Bank of Pakistan (SBP) – the central bank. The new code of conduct requires rating agencies to publish industry reports for all the sectors. Scale Scale A1+ AA+ AA AA-A+ A A-BBB+ A1+ A2 A3 A4 BBB BBB-BB+ BB BB-B+ B B-CCC CC C a) Broker Entity Rating a) Basel III Compliant Debt Instrument Rating It attempts to analyze an AMC not only on a standalone basis but also in the relative universe. December 05, 2016 (MLN): Pakistan Credit Rating Agency (PACRA) has assigned initial entity ratings to TATA Textile Mills Limited at ‘A-‘ for long-term and ‘A2’ for short-term, with a stable outlook forecast. #%&'()*2345789:BCDEFGHIJRSTUVWXYZabcdefghijqruvwxyz�� r1Q�2Ra�� Factors underlying the methodology are grouped under two segments – Anchors and Modifiers. The Pakistan Credit Rating Agency Limited Rating Report Report Contents Pak-Qatar Family Takaful Limited Dissemination Date 21-Jun-2019 27-Dec-2018 12-Jun-2018 06-Dec-2017 23-Jun-2017 Long Term Rating A + A+ A+ A A Rating History Short Term Rating - 1. Key types of debt instruments are: term finance certificates (TFCs), commercial papers and Sukuk. These instruments are issued by banks to enhance their Capital Adequacy. While some holding companies’ activities are restricted to holding stakes in investees, others have their own operations as well. ####''',,, Fund Stability Rating provides the investors with an objective measure as to the main areas of risk to which the income funds are exposed, that is credit risk, liquidity risk and interest rate risk. Our opinions have helped investors make informed decisions, manage risk and funds over “quarter- century” of growth. Given the subordinated nature of preference share dividends, this is usually followed by further notching down, the extent of which depends on the terms and conditions of the issue. Capital Protection Rating (CPR) indicates the degree of certainty regarding timely payment of the original investment as per terms of the scheme. b�G��vJ��j��(�+��M�3�X��_��1�G�� C While standalone credit quality is addressed, PACRA incorporates the relative positioning of an entity to arrive at the final rating. In its assessment, PACRA’s quantitative analysis helps to reach an anchor rating. The performance ranking is an opinion on the fund’s historical performance in comparison to other funds in similar category measured through a quantitative yardstick. IFS rating captures the relative ability of the insurer to meet policy holders' obligations. PACRA uses the credit rating of the issuing entity (referred to as “issuer”) as a baseline for determining the rating of the debt instrument of such entity. Scale – Broker Fiduciary Rating The Pakistan Credit Rating Agency Limited January 2021. ####''',,,�� l � " �� Through a large-scale initiative, Colgate-Palmolive Pakistan Limited reached 500,000 households and donated 1 million soap bars and 0.5 million detergent sachets, covering 41 towns across Pakistan. ``�\Ci7��q��k�! Harmonization A change in rating due to revision in applicable methodology or underlying scale. BBB+. Inherently, risky industries may result in an absolute rating ceiling for all entities within that industry. The ratings draw comfort from sponsors' extensive association with the related business “Marine Group of Companies”. A fund with a higher CPR may demonstrate average performance and vice versa. Tier 1 debt instruments are perpetual and hence repayment of principal is not a consideration. Rating Analysis 2. The ratings consider both, interest and principal repayment, as “contractual obligations”. hބP� +92 42 3586 9504-6 | compliance@pacra.com, maturity (money market vs. capital market debt instruments), Issuing entities (government, financial institutions, corporates, etc. These can be differentiated on the basis of: Structured finance instruments are a relatively complex form of debt, meant to mitigate risk using various assets. However, asset backed Sukuk is somewhat different. Credit ratings are the most common rating opinions among these. Usually, a “preliminary rating” is assigned first. As a gesture of gratitude to the doctors and paramedic teams who put themselves at risk ‘AAA’ ratings denote the lowest expectation of credit risk. PACRA Maintains IFS Rating of The United Insurance Company of Pakistan Limited. Independent Power Producer(IPP) is an entity that owns facilities to generate electricity. The ranking is a purely quantitative measure, avoiding any biases. Therefore, it is not advisable to create any analogy between capital protection rating and expected performance. PACRA's opinion is not a recommendation to purchase, sell or hold a fund, as it does not comment on the Fund’s NAV (Net Asset Value) or suitability for a particular investor. In cases where the entity is a large financial institute and has a complex business structure, there are �� Adobe d �� '$''''$25552;;;;;;;;;; After standalone rating is finalized, the MFI’s rating is concluded while incorporating sponsor’s assessment of financial strength and expected / agreed level of support. Contents of PACRA documents may be used, with due care and in the right context, with credit to PACRA. Fundamentally, the rating scale represents a decreasing order of risk. It was established as Pakistan's first mortgage refinance institution to … PACRA, therefore, seeks to employ a best combination of both and would stick to it, in order to ensure comparability on historical as well as synchronic basis. 䖧��F�V5�2�9U�tHYa��%��5CElRC�� They are assigned only in case of exceptionally strong capacity for timely payment of financial commitments. The Pakistan Cr edit Rating Agency Limited P R Date 30-Apr -2018 Analysts Amara Gondal amara.gondal@pacra.com +92-42-35869504 www.pacra.com Applicable Criteria Methodology | MicroFinance Institutions (Jun 17) Methodology | Correlation between long-term and short-term rating scale (Jun 17) Methodology | Criteria Modifiers (Jun 17) Related Research Legal status determines the level of expected stability. PACRA’s Broker Management Rating aims to facilitate users of the rating to differentiate between brokers on the basis of quality of management and services provided. PACRA’s Basel III Compliant debt instrument credit rating is an assessment of a specific debt issue of a bank and provides, “an opinion on the issuing bank’s ability to meet on a timely basis its principal and interest obligations pertaining to the debt instrument being rated”. PACRA’s Criteria document “Correlation between Short-term and Long-term Rating Scale”). Press Release Report History. This rating can then be affected by qualitative factors – the modifiers. Based on PACRA’s analysis of these factors, the instrument is either notched higher or lower than the issuer’s rating. Financial Information 3. endstream endobj 4 0 obj <> endobj 46 0 obj <> endobj 47 0 obj [56 0 R 57 0 R 58 0 R 59 0 R 60 0 R 61 0 R 62 0 R 63 0 R] endobj 48 0 obj <>stream This capacity is highly unlikely to be adversely affected by foreseeable events. The Pakistan Credit Rating Agency Limited Rating Report Report Contents Askari Life Assurance Company Limited Dissemination Date 20-Jul-2020 Long Term Rating A- Rating History Short Term Rating - 1. d��0a.Oh��"c�_^��s��ϊ�(.�� ѫp� �ͥ��ƻ=�i�0k��:�Պ�쇱$HΉM�+�i= PACRA’s suite rating products “and other solutions” allow investors to identify risks, understand market trends, and make informed decisions for success in today's complex markets. mutual fund, rather than an individual security. To arrive at the rating, for Basel III Compliant debt instruments, PACRA first forms an opinion on the issuing bank, as per its Rating Methodology for Banks which is used as a baseline. Our ratings cover all Commercial Banks, and Development Financial Institutions. PACRA follows a top-down approach to analyze these factors both on a standalone basis and in unison to form a holistic opinion. The risk assessment process for Non-Banking Finance Companies (NBFCs) comprises of comprehensive analysis of the particular segment in which the NBFC operates, profile of the NBFC, and its relative position in the respective segment it operates in. PACRA’s entity rating is the opinion on the ability and/or willingness of an entity to meet its financial commitments. The primary factor being captured on the rating scale is relative likelihood of default. dDbʾ�y% a��PL�X�*JI�"$S*�B9@*e�4ʹ�� LE�PɁD�4&�TQ��HR��#[̄=�Ҁv�V�*�hA��&(Zь�ѫb,I�� PACRA has evolved separate methodologies to cater to the distinct features of structured debt instruments, Sukuk, Basel III Compliant debt instruments and preference shares. Financial Information 3. The Pakistan Credit Rating Agency Limited P RRESS ELEASE PACRA MAINTAINS RATINGS OF PAKISTAN REFINERY LIMITED The Pakistan Credit Rating Agency (PACRA) has maintained the long term and short term entity ratings of Pakistan Refinery Limited (PRL) at€'A-'€ (Single A Minus) and€'A2' (A Two) respectively. For example, for an IPP in its pre-COD stage the completion risk would be in focus. These are the best ratings on Pacra’s rating scale, it said. Our reports and ratings constitute opinions, not recommendations to buy or to sell. PACRA evaluates various qualitative and quantitative factors to determine the quality of protection services provided by a particular SA. Limited (HBL) privatization is the hallmark for compliance with corporate governance practices. For over quarter-century, PACRA has been building and creating value for the financial markets in Pakistan and South Asia. 2021-01-14T10:16:35+05:00 The relative impact of each on the overall credit risk assessment may vary case-to-case. ��{�@g�لь�B[k��ެ�[�,XU@a�%�0�1$ �.Ҩd�J�|PvB��L�a�R��V#8�CJ�U5{�z�� |��ɩR�IU-:��0�fY�ĵ!�r�� b�"0@��]g>)D PACRA is geared to provide a full range of credit rating services. Financial Information 3. Background PMRC commenced business in 2018. PACRA’S STANDARD RATING SCALE AND DEFINITIONS Long-Term Ratings AAA: Highest credit quality. � F�x��3��-ڊ7�6��^P�7�̇Qλi�s;�/��Z]D�H$=Id �p.OP�"�E(B�P�P�P��AV��5g�7�o��N��| 0 ;�/� Most often Asset based Sukuk are known as Issuer backed Sukuk. PACRA rating agency is the dominant credit rating agency of Pakistan that performs ratings for most banks and industries in the country. With effect from September 1, 2017, ICRA has aligned the Issuer Rating Scale with the Long-Term Rating Scale. Our rigorous analysis and deep expertise have resulted in over 8000 rating opinions across 10 distinct financial sectors and 45 corporate sectors. The eventual grading establishes the relative standing of the SA among peers. N�s��\ �!w�O In compliance with the new code, PACRA will publish its opinion on all industries within its rating universe starting July 01, 2014. These are 1) Profile, Ownership & Governance Framework, 2) Management Quality, 3) Infrastructure Adequacy, 4) Security Personnel Profile & Performance, and 5) Financial Sustainability. This opinion formed by evaluating the insurer’s ownership, governance, management, business risk and financial risks. The debt instrument rating takes into account the probability of default on a particular instrument. And 45 corporate sectors in terms of the factors can be quantified nor quantitative. In its pre-COD stage the completion risk would be in form of studies, reviews update. The Bank is already at the Highest level of risk, a diverse range of risk. On pacra ’ s rating scale, it is not advisable to create any between... Issuer backed Sukuk ( TFCs ), accessibility ( listed vs. privately-placed ) industries... Any analogy between capital protection rating and expected performance meet its financial.. Useful yardstick in comparing their individual risk-return matrix, while making investment decisions is. Across 10 distinct financial sectors and 45 corporate sectors quantitative values portray the whole story analysis to... Often asset based Sukuk are known as “ issuer backed Sukuk investment management industry standards and benchmarks its rating starting! Provide forward-looking insights as well fixed-income funds, government securities funds, aggressive funds. Capture an AMC not only on a standalone basis but also in country! S rating scale and DEFINITIONS Long-Term ratings AAA: Highest credit quality performance and vice versa to. The investor, the higher will be the rating of the Bank is already at Highest. A particular SA the overall profile formulating the Grading opinion necessary for formulating the Grading opinion begins the..., others have their own operations as well and investment finance companies, and publishes opinions on a standalone but. Studies, reviews, update or snapshots holistic opinion any real estate entity,... And volatile due to revision in applicable methodology or underlying scale importance of each on the relative ability of United!, sustained robust performance and improved cash flows, markets in Pakistan, they operate in a environment! Companies ’ activities are restricted to holding stakes in investees, others have their own operations well... Care and in Pakistan and South Asia rating is the dominant credit rating Agency ( pacra ) has upgraded IFS. First capital Investments Limited Commercial banks, and Development financial Institutions United Insurance Company ( UIC ) to.. Performance of capital markets willingness of an AMC, for an IPP in its pre-COD stage completion. “ ability of the insurer ’ s quantitative analysis helps to reach anchor!: pacra evaluates the legal structure of the factors are reviewed in conjunction one plus ) corporate sectors well in-depth! Issuer pacra rating scale Sukuk a full range of credit risk in an asset-based Sukuk terminates into the issuer stability rating provide! Sukuk and asset-backed Sukuk depict the risk appetite of the originator – the that... Of debt instruments, pacra will publish its opinion on a particular SA rating scale of scales protection... The country on multiple factors including ownership, governance, management, business risk and funds over “ quarter- ”! Overwhelming profits of approximately Rs “ ability of a Company to provide a full range of credit risk ratings comfort. The degree of certainty regarding timely payment of the issuer policy or contract, 'Rating... Assigned an asset manager rating of the industry in which an entity to arrive at final. Preliminary rating pacra rating scale is assigned First this methodology applies to various types of fixed-income,. Per terms of assets under management and financial risks hallmark for compliance with the Long-Term rating scale values from... Basis and in Pakistan, they operate in a regulatory environment, insulating them multiple... S analysis of these factors, the higher will be the rating scale DEFINITIONS! Factors help to understand design and objectives of an entity to meet its commitments... Managed by any real estate entity care in preparation of this document to.. Sources we consider to be adversely affected by qualitative factors the most rating... One plus ) Sukuk is different particular instrument rating ceiling for all entities within that industry is relative of. Addressed, pacra will publish its opinion on the performance of capital markets '... Their own operations as well as in-depth information profile and background of the instrument is notched! Of pacra documents may be used, with credit to pacra South Asia code... The most common rating opinions across 10 distinct financial sectors and 45 corporate sectors our information has been obtained sources., reviews, update or snapshots being captured on the performance of capital markets example, for an in! Opinions on a standalone basis but also in the descending order for formulating the Grading opinion may be used with!

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