KARACHI: VIS Credit Rating Company Limited has assigned preliminary rating of single A One plus to K-Electric Limited’s proposed Islamic Commercial Paper (ICP-8) issue of up to Rs 3.5billion.
The ICP-8 will have a tenor of 6 months which will be utilized for funding KE’s working capital requirements, said release on Wednesday.
KE has been assigned entity rating of double A/A-One Plus. The assigned rating recognize the strategic importance of KE, a vertically integrated utility company, that has exclusive distribution rights in its service area i.e. Karachi and adjoining areas of Sindh and Baluchistan.
Business risk profile draws support from growing demand for electricity and continuous improvement across various operational metrics including reduction in transmission and distribution and aggregate technical and commercial losses.
Overall financial profile is expected to remain adequate during the rating horizon. With the NEPRA’s determination of monthly FCA for the period July 2016 to June 2019 and quarterly tariff variations for the period July 2016 to March 2019, working capital cycle of the Company is expected to improve. Audited financial statements of the Company are expected to be finalized in the on-going month.