VIS Assigns Preliminary Rating to Proposed Islamic Commercial Paper of Mughal Iron and Steel Industries Limited

Business News English

Karachi, June 30, 2021 (PPI-OT):VIS Credit Rating Company Limited (VIS) has assigned preliminary instrument rating of ‘A-2’ (A-Two) to proposed Islamic Commercial Paper (ICP) issue of Rs. 1.827b of Mughal Iron and Steel Industries Limited (MISIL). The short-term rating of ‘A-2’ denotes good certainty of timely payments. Liquidity factors and company fundamentals are considered sound.

The ratings assigned to MISIL take into account the company’s position amongst major players in the long steel sector of Pakistan. Product portfolio of the company comprises steel rebars, billets, girders and copper ingots. The assigned ratings take into account extensive experience of sponsoring family. The ratings draw comfort from sizeable scale of melting and re-rolling mill capacities, underpinned by installation of new furnaces and completion of balancing, modernization and replacement (BMR) of existing re-rolling mill.

MISIL is in process of issuing rated, unlisted, ICP for working capital requirements. Tenor of the instrument will be 360 days and will be redeemed at face value after adjustment of profit/loss upon presentation by last endorsee to the issuing paying agent on the maturity date. The indicative profit/discount rate is 6-month KIBOR plus 1.75% per annum. The instrument will be re-priced Bi-annually. Subsequent to issuance of ICP, gearing and leverage ratios are projected to remain stable on a QoQ basis as the impact of increase in borrowings is offset by higher equity base owing to receipt of remaining proceeds from rights issue after March 31, 2021. MISIL has an outstanding entity ratings of ‘A/A-2’ (Single A /A-Two) and Sukuk-1 rating of ‘A+’ (Single A Plus).

For more information, contact:
Director Compliance and Rating Analytics,
VIS Credit Rating Company Limited
VIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi, Pakistan
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: bilal@jcrvis.com.pk
Website: https://www.vis.com.pk/

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