Pakistan Credit Rating Agency maintains entity ratings of First Fidelity Leasing Modarba
Lahore, December 12, 2012 (PPI-OT): The Pakistan Credit Rating Agency Limited (PACRA) has maintained the long-term and short-term ratings of First Fidelity Leasing Modaraba at BBB+ (Triple B plus) and A2 (A two). The ratings denote low expectation of credit risk and an adequate capacity for timely payment of financial commitments. The ratings reflect adequate financial profile of FFLM supported by its equity based capital structure.
The Modaraba’s core financing activities are only adequate to ensure breakeven, while reported profits mainly emanate from gains on investment properties. Meanwhile, FFLM has experienced fresh loan infection, though with management’s close monitoring, net loss is expected to be limited.
A significant portion of FFLM’s assets constitute non-earning investment properties. Although the management is making efforts to liquidate these investments, yet delay in execution of its plan may constrain its financial profile.
The ratings are dependent on the management’s ability to timely execute its strategy while generating profitability from the core business. Meanwhile, any leveraging, leading to assets – liability mismatch, and/or material deterioration in the lending portfolio or value of investment properties could have negative implications for ratings.
For more information, contact:
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