July 25, 2022 (MLN): Fitch Ratings has revised the Outlook on Pakistan Water and Power Development Authority (WAPDA) to Negative from Stable while affirming its Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'B-'.
The outlook revision follows the revision of the outlook on the Pakistan sovereign rating on 18 July 2022, as WAPDA's ratings are equalized with that of the Pakistan sovereign, and sensitive to any rating action on the sovereign, Fitch in its report said.
To highlight, on July 18, Fitch revised Pakistan's Outlook to Negative from Stable while affirming its Long-Term Foreign-Currency IDR at 'B-'.
As per the rating agency, the revision of the outlook to Negative reflects a significant deterioration in Pakistan's external liquidity position and financing conditions since early 2022. In addition, Fitch assumed IMF board approval of Pakistan's new staff-level agreement with the IMF but sees considerable risks to its implementation and to continued access to financing after the program's expiry in June 2023 in a tough economic and political climate.
Fitch categorizes WAPDA as credit-linked to the sponsor and equalizes the ratings with that of the Pakistan sovereign.
In its previous rating on March 14, Fitch affirmed WAPDA's Long-Term Foreign-and Local-Currency Issuer Default Ratings at 'B-' with a stable outlook.
WAPDA is established under a special statute. The Authority has close operational and administrative linkage to the government and is mandated to develop water and power resources in Pakistan.