Pacra maintains HBFC ratings at A, A1

The Pakistan credit rating agency limited (Pacra) has maintained the long-term and short-term entity ratings of House Building Finance Corporation Limited (HBFC) at A (Single A) and A1 (A One), respectively. The rating of secured TFC issue of 1,500 million rupees has also been maintained at ''''A+'''' (Single A Plus). The rating denote a low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments.

HBFC''''s ratings reflect its ownership structure - fully owned by the Government of Pakistan''''s (GoP) through the State Bank of Pakistan (SBP) and the Ministry of Finance - and given HBFC''''s pivotal role in GoP''''s commitments in expanding the housing stock in the country, wherein the government is likely to continue supporting the Corporation. Meanwhile, the ratings recognise the Corporation''''s adequate equity-base and strong liquidity position.

The ratings also take into account the ongoing restructuring process of the entity aimed at bringing the requisite level of efficiency in operations. The ratings recognise the weakness in the governance structure- substantial delay in appointment of a new MD and holding of BOD meetings - could have negative implications for the corporation''''s prospects and can hamper the management''''s commitments towards the ongoing restructuring process.