Pakistan Credit Rating Agency maintains rating of structured PPTFCS issued by city schools Private Limited

Lahore, January 15, 2013 (PPI-OT): The Pakistan Credit Rating Agency Limited (PACRA) has maintained the rating of ‘A+’ (Single A Plus) of structured privately placed TFCs of PKR 1.150m issued by City Schools (Pvt.) Limited (CSPL). This rating indicates a low expectation of credit risk emanating from a strong capacity for timely payment of financial commitments.

The rating primarily draws its strength from the security structure of the instrument. This includes, inter alia, first exclusive charge over dividend receivables from two operational independent power producer (IPPs, ~700MW) and assignment of the same in favor of the Agent Bank, and first equitable mortgage over land and building of City Schools with 20% margin.

With the repayment of long term debt by both IPPs, dividend payment is expected to continue providing requisite cash flow for the remaining instrument repayments. Nevertheless, the rating incorporates challenges ensuing from continuing tough socio-economic environment beset particularly with circular debt in energy chain, adding uncertainty to timeliness of cash flows to IPPs.

The rating is dependent on the continued compliance with the predefined security structure of the instrument. Moreover, any significant deterioration in the performance of the IPPs, impacting the projected dividend stream, would have negative implications for the rating.

For more information, contact:
Hammad Rashid
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com

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