Pakistan Credit Rating Agency assigns rating to GoP guaranteed Privately Placed Term Finance Certificates of Water and Power Development Authority

Lahore, September 26, 2013 (PPI-OT): The Pakistan Credit Rating Agency (PACRA) has assigned a rating of ‘AAA’ (Triple A) to the GoP guaranteed Privately Placed Term Finance Certificates (PPTFC) of PKR 9,327mln being issued by WAPDA. The rating denotes the lowest expectation of credit risk.

The rating of the TFCs reflects an unconditional and irrevocable guarantee by the Government of Pakistan (GoP). The guarantee covers the payment of total outstanding amount of the TFCs and related profit component. GoP would pay the entire called amount immediately upon receiving a demand notice from the trustee.

The rating apart from a debt payment and guarantee mechanism recognizes WAPDA’s strategic importance as the major hydroelectric power supplier to the country. WAPDA receives a tariff based revenue from NTDC/CPPA against supply of electricity. The development projects are primarily financed through cash development loans or foreign re-lent loans from GoP. This provides flexibility to WAPDA in managing its financial profile.

The financial profile of WAPDA, though plagued by circular debt in the past, has drawn comfort from lately established payment mechanism with the power purchaser. This is ensuring timely receipt against monthly bills. The continuation of the same is important to maintain healthy cash flows, in turn, good coverages.

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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