February 8, 2019 (MLN): Pakistan Credit Rating Agency (PACRA) has assigned initial stability rating of ‘AA-(f)’ to NBP Government Securities Plan – I for long term, while the outlook on the rating is ‘stable’.
In its official press release on the occasion, the rating agency elaborated 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).
Explaining this further, it said that the projected asset allocation of the fund includes approximately 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 around 700 days, resulting in high exposure to interest rate volatility.”
Going forward, PACRA believes that 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.”
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