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June 15, 1994 - a joint venture agreement is signed between International Finance Corporation (IFC) , Fitch Ratings , and Lahore Stock Exchange. This agreement heralded the creation of Pakistans first credit rating agency, the Pakistan Credit Rating Agency Limited (PACRA) on August 18, 1994. Introducing credit ratings at a time when even the concept of free capital market was not well-rooted in the country was no easy feat; however, PACRA accomplished just that. PACRA announced its first opinion in less than three months. PACRA fast gained a recognition on the perceived value and integrity of its opinion. During the initial years, PACRA relied heavily upon its technical partner, Fitch Ratings. The technical collaboration with a global rating agency ensured that PACRA developed a high quality rating process. This remained intact even after the mutually agreed decision in 2002 to terminate the said arrangement. Today, PACRA is recognized as a national rating agency by apex regulators of the country, the Securities and Exchange Commission of Pakistan and an external credit assessment institution (ECAI) by the State Bank of Pakistan. It has a vibrant presence in the region. In 2010, PACRA moved across borders and started providing technical collaboration to National Credit Ratings in Bangladesh. PACRA is one of founding members of Association of Credit Rating Agencies in Asia (ACRAA).
of rating relationship to arrive at a rating opinion. The rating process, subscribes to rigorous quality standards. PACRA has developed comprehensive methodologies for different segments of entities Banks, NBFCs, Insurance, AMCs, Corporate. We evaluate and analyze both qualitative and quantitative aspects and captures factors affecting the entity in the shortterm and long-term. Our analyses broadly focus on ownership and governance structure of the organization, its management and control environment and evaluation of business and financial risks. Following is the Rating process of PACRA.
questionnaire.
JCR-VIS: Conducts pre due diligence meeting analysis. Conducts due diligence meetings (takes 4 -5 weeks). J JCR-VIS: Conducts post due diligence analysis. Brief for internal rating committee meetings is prepared. CR JCR-VIS: Sub Committee recommends preliminary/initial rating. Rating Committee decides the preliminary/initial rating. Client
Clients: Receives the rating rationales and rating issues. CR JCR-VIS: Notifies issuer of the preliminary/initial rating, deliberates on appeals by client, if any. Client Clients: Consents to release of preliminary/initial rating to the public in case of non-mandatory ratings.
JJC