The Pakistan Credit Rating Agency (Pacra) has maintained the long-term entity rating of ORIX Leasing Pakistan Limited (OLP) at 'AA' (Double A), and the short-term rating at 'Al+' (A one plus). The ratings for the Term Finance Certificates (TFC5) of PKR 2,500mm, PKR 5,000mm and PKR 1,000mm have also been maintained at 'AA+' (Double A plus). These ratings denote a very low expectation of credit risk emanating from a strong capacity for timely payments of financial commitments.
The ratings of OLP reflect its established business profile emanating from its leading position in leasing industry, well-rooted penetration into target market, diverse product portfolio, and good management quality. The ratings also recognize management's initiative inter alia, strengthening the role of risk management in underwriting new business, controlling cost structure, and improving profitability. However, impaired portfolio - though reducing-remains a cause of concern. Cognizant of the company's need and subdued economic environment, the management is following a cautious growth strategy with an emphasis on improving its core margins. Nevertheless, the ratings draw comfort from historically demonstrated commitment by ORIX Corporation, Japan towards its operations in Pakistan.
The company has a network of more than 30 offices across Pakistan. OLP's major shareholder, ORIX Corporation, Japan (ORIX), rated A3, by Moody's, having just below 50 percent shareholding, and continues to exercise control through the Board of Directors. ORIX, with a consolidated asset base of over US $l04 billion as at end-Jun11, has operations in 27 countries, and regions. Experienced professionals with majority representation of ORIX Corporation dominate the Board. Teizoon Kisat, a Chartered Accountant by profession, elevated to the position of CEO lately, has been associated with company for last twelve years. A team of seasoned professionals assists him.
TFCs: The company has issued three secured TFCs - two listed and one privately placed. Listed TFC of PKR 2,500mm was issued in May07 for a tenor of 5 years, at the rate of 6-months KIBOR plus 150bps, payable semi-annually.-PR
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