VIS finalizes instrument rating of A+ assigned to Sukuk 3 of Agha Steel Industries Limited

August 28, 2023 (MLN): The VIS Credit Rating Company Limited (VIS) has finalized the instrument rating of ‘A+’ (Single A Plus) to Sukuk 3 of Agha Steel Industries Limited (ASIL).

The outlook on the assigned rating is ‘Stable’. The previous rating action was announced on July 07, 2023.

ASIL issued a Sukuk of size Rs3.4bn on August 17, 2023, as a debt swap for the prepayment of the Company’s previous outstanding Sukuk issue.

The instrument will have a tenor of 4 years which includes a grace period of 1.5 years. The principal shall be paid in equal quarterly installments commencing from the 21st month after issuance.

The issue is secured by a first pari-passu hypothecation charge over all present and future fixed assets of the company with a margin of 25% as well as a first pari-passu equitable mortgage charge over the company’s rights in immoveable property with a 25% margin.

Additionally, the company is required to deposit one-third of the upcoming coupon payment each month in a Debt Payment Account (DPA).

To provide further reassurance to investors of timely payments, any shortfall in the same will necessitate cash equity injections by the Company’s sponsors, as per the Sponsor Support Agreement.

The assigned ratings are strongly contingent on the unconditional sponsorship backing provided in the aforementioned agreement.

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