Pakistan Credit Rating Agency maintains rating of structured term loan facility of Spencer and company (private) limited

Lahore, September 14, 2012 (PPI-OT): The Pakistan Credit Rating Agency (PACRA) has maintained the rating of structured term loan facility of PKR 420mln issued by Spencer and Company (Private)Limited (SCL) at ‘AA’ (Double A). The rating denotes very low expectation of credit risk and very strong capacity for timely payment of financial commitments.

The rating reflects the sound security structure of the structured finance facility. SCL (the lessor) has surrendered its right to receive the rent (from Unilever Pakistan Limited, the lessee) in favor of Askari Bank against the finance facility. Under the structure of the loan, rent received from UPL is exclusively reserved/assigned for the repayment of the loan; hence repayment risk lies with UPL.

During the tenor of the facility, the tripartite lease agreement cannot be altered/terminated without prior written consent of the lender. Meanwhile, UPL has undertaken to unconditionally cover the payment of total outstanding amount of the facility and related mark-up component directly to Askari Bank.

The rating recognizes UPL’s strong financial profile, supported by its healthy cash flows, sustained turnover growth and a low leveraged capital structure. However, any significant deterioration in the financial profile of UPL caused by an unfavourable working capital cycle, though unlikely, may have negative impact on the rating

For more information, contact:
Hammad Rashid
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

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