Bangkok--1 Nov--S&P Global Ratings
SINGAPORE (S&P Global Ratings) Nov. 1, 2016--S&P Global Ratings said today that it had raised the long-term corporate credit rating on Pakistan-based wireless sercvice provider Pakistan Mobile Communications Ltd. (Mobilink) to 'B' from 'B-'. The outlook is stable.
We upgraded Mobilink following a similar action on the recent sovereign credit rating on Pakistan (B/Stable/B).
"We continue to assess the stand-alone credit profile of Mobilink as 'bb-', reflecting the company's leadership in terms of subscribers in Pakistan's competitive market and its modest leverage," said S&P Global Ratings credit analyst Ashutosh Sharma. "However, we believe the country and macroeconomic risk of Pakistan will continue to weigh on the company's credit profile."
In our view, the rating on Mobilink remains constrained by our 'B' transfer and convertibility assessment for Pakistan.
The stable outlook on Mobilink reflects the outlook on our sovereign credit rating on Pakistan.
"We are unlikely to lower the rating on Mobilink if the company's operating and financial performances deteriorate, given that the company's stand-alone credit profile is two notches above the corporate credit rating.
However, we may lower the stand-alone credit profile by one notch if Mobilink faces challenges in integrating Warid Telecom (Pvt.) Ltd. or if its operating performance deteriorates. A downgrade trigger will be the ratio of funds from operations to debt falling below 35% and staying there for a prolonged period.
We could upgrade Mobilink if we raise the sovereign credit rating on Pakistan. The company's better operating performance could only improve its stand-alone credit profile, given the sovereign rating constraint.