JCR-VIS Credit Rating Company Ltd (JCR-VIS) has assigned a preliminary fund stability rating of 'AA-(f)' to Pak Oman Advantage Fund (POAF). The rating will be finalised following a review of final trust deed and offering document.
According to press release the fund will be managed by Pak Oman Asset Management Company Limited (POAMC), whose sponsors are Pak Oman Investment Company Limited, Oman National Investment corporation Holding, Bank Muscat SAOG, and National Logistics Cell SRBF.
Pak Oman Advantage Fund is structured as a closed end scheme. The fund size is proposed to be Rs 1 billion and the seed capital of Rs 100 million has been provided by Pak Oman Investment Company Limited. The objective of the fund is to provide tax efficient fixed income returns while maintaining credit risk and price risk at low levels. The investment policy has been developed to meet this objective. At least 75 percent of the fund's net assets will be invested in TFCs issued by commercial banks, eligible for tier-II capital, those are floating rate instruments.
The remaining 25 percent may be invested in other fixed income instruments including clean placements with institutions rated in 'A' category or above, or Continuous Funding System (CFS). Maximum scrip wise exposure in case of CFS will not exceed 5 percent of the fund's net assets. Funds raised in the pre-IPO session will be placed at TFCs or bank deposits.
The fund will have a limited life of eight years, after which it would be wound up and investors will be paid. Any investment made will therefore be in instruments that mature within this period. The 75.25 ratio may be relaxed when maturity of the underlying Tier-II TFCs commences. However, the investment advisor will keep the duration and the risk profile of the fund intact. This relaxation will only be permitted after 5 years from the date of initial issue of the fund.-PR
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