The Financial Express

Pakistan's proposed sukuk assigned 'B' preliminary rating

| Updated: November 23, 2017 12:59:38

Pakistan's proposed sukuk assigned 'B' preliminary rating

SINGAPORE (S&P Global Ratings) Nov. 21, 2017--S&P Global Ratings today

assigned its preliminary 'B' long-term foreign currency rating to the planned

U.S. dollar-denominated sukuk (trust certificates) issuance by The Third

Pakistan International Sukuk Co. (PAK3 Sukuk).


PAK3 Sukuk is a public limited liability company incorporated in the Islamic Republic of Pakistan.


The preliminary 'B' issue rating on the trust certificates reflects the rating

on Pakistan because the transaction fulfils our conditions for rating sukuk at

the same level of its sponsor (see "Methodology For Rating Sukuk," published

Jan. 19, 2015, on RatingsDirect):


“We assess as remote the risks that a total loss event jeopardizes the

full and timely repayments of the trust certificates. Our opinion is

based on the underlying assets, consisting of a highway with all

construction, superstructures, flyovers, and interchanges made on the

date of the agreement,” said a statement.


Pakistan's legal obligations under the sukuk terms

and conditions might leave investors exposed to residual assets risks.

Pakistan has the obligation to ensure that the assets are covered by

insurance and to make up any shortfall between insurance proceeds and the

principal amount, under a total loss event scenario, unless it proves

beyond any doubt that it has complied with its insurance obligations.



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