HUBC issues long term Sukuk worth Rs.7 billion - PACRA

August 30, 2019 (MLN): Pakistan Credit Rating Agency (PACRA) has assigned initial rating of ‘AA+’ for ‘long term’ to Hub Power Company Limited, while the outlook forecasted on the rating is ‘stable’.

As per an official press release by the agency on this occasion, the rating reflects the holding company character of HUBC with an exclusive focus on the different dimension of the energy sector.

PACRA further apprised in this document that HUBC aims to expand generation capacity to boost the country's power generation by utilizing Pakistan's indigenous natural resources. The company is setting up the following new coal power plants:

1. China Power Hub Generation Company (CPHGC): 2x660MW coal fired power plant at Hub,
2. Thar Energy Limited (TEL): 330MW mine-mouth coal fired power plant at Thar and
3. Thalnova Power: 330MW mine-mouth coal fired power plant at Thar.

Moreover, after Rs.12 billion were issued from three short term Sukuks in March 2019, April 2019 and May 2019, HUBC has issued a long term privately placed Islamic/Conventional certificates (Sukuk) of Rs.7 billion to partially finance the equity investment of HUBC in growth projects.  

The privately placed sukuk, having a tenor of four years, carries a profit rate of 3MK + 190bps and has a grace period of two years. Furthermore, the instrument is backed by corporate guarantee from NEL for its repayment, informed PACRA.

“The redemption will commence from the third year of the issue date in four equal principal installments and shall continue till the maturity of the instrument,” they established.

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