NBP Government Securities Plan - I to maintain exposure in govt bonds: PACRA

March 1, 2019 (MLN): Pakistan Credit Rating Agency (PACRA) has assigned initial stability rating to NBP Government Securities Plan – I at ‘AA-(f)’ for long term, while the outlook on this rating action is ‘stable’.

To explain this action further, PACRA released an official statement in which the agency accounts that the rating incorporates the fund's very strong credit quality and moderate liquidity profile emanating from the fund's strategy to invest most of its funds in government securities (PIBs).

The projected asset allocation of the fund includes around 10% Bank Deposits in 'AA-“ and above rated' banks, whilst maintaining nearly 90% of the funds' AUMs in PIBs 'AAA rated'.

The projected duration of the fund would be approximately 700 days, resulting in high exposure to interest rate volatility. The unit holding pattern of the fund is expected to be around 50% each in institutional and retail investors.

“Going forward, the fund will be maintaining its exposure in government bonds. Material changes in the fund's asset allocation strategy, which could negatively impact the fund's credit quality and exposure to interest rate risk, remains critical for the rating,” cautions PACRA

Copyright Mettis Link News