JCR-VIS Credit Rating Company Limited has revised the entity rating of Saudi Pak Leasing Company Limited (SPLC) to 'BBB-/A-3' (Triple B Minus/A-Three) from 'BBB/A-3' (Triple B /A-Three). Rating on the outstanding TFC issue has also been revised to 'BBB' (Triple B).
The company has not been able to keep itself immune from happenings at the macro level and the NBFC sector continues to face severe liquidity crunch. The financial sector has also been faced with increased level of delinquencies in the fact of increased cost of doing business and high interest rates.
Within this context, financial risk indicators of SPLC including debt leverage, current ratio and quantum of un-provided non-performing loans (NPLs) vis-à-vis capital have continued to deteriorate over time. Capital market losses have also contributed to erosion in capital.
Ratings continue to be placed under 'Rating Watch-developing status' in view of the ongoing merger negotiations with Emirates Global Islamic Bank Limited. Ratings may be faced with further downward pressure if the company is not re-capitalised within a very short time period.-PR