SINGAPORE (S&P Global Ratings) Nov. 21, 2017--S&P Global Ratings today
assigned its preliminary 'B' long-term foreign currency rating to the planned
U.S. dollar-denominated sukuk (trust certificates) issuance by The Third
Pakistan International Sukuk Co. (PAK3 Sukuk).
PAK3 Sukuk is a public limited liability company incorporated in the Islamic Republic of Pakistan.
The preliminary 'B' issue rating on the trust certificates reflects the rating
on Pakistan because the transaction fulfils our conditions for rating sukuk at
the same level of its sponsor (see "Methodology For Rating Sukuk," published
Jan. 19, 2015, on RatingsDirect):
“We assess as remote the risks that a total loss event jeopardizes the
full and timely repayments of the trust certificates. Our opinion is
based on the underlying assets, consisting of a highway with all
construction, superstructures, flyovers, and interchanges made on the
date of the agreement,” said a statement.
Pakistan's legal obligations under the sukuk terms
and conditions might leave investors exposed to residual assets risks.
Pakistan has the obligation to ensure that the assets are covered by
insurance and to make up any shortfall between insurance proceeds and the
principal amount, under a total loss event scenario, unless it proves
beyond any doubt that it has complied with its insurance obligations.