PACRA maintain the rating of Kashf Foundation | PPTFC | PKR 2.483bln | Dec-23

Kashf Foundation issued a Rated, Secured, Privately Placed, DSLR Listed Term Finance Certificates amounting PKR 2.483bln to expand the micro-infrastructure finance. PPTFC is the first gender bond being issued in Pakistan and MENA regions. The rating of the instrument is supported by its strong security structure i.e. (a) the bond is fully principal guaranteed by Infrazamin Pakistan Limited (IZP), in addition to two interest installments. The total maximum guaranteed amount is PKR 2.85bln (b) Exclusive lien on a debt service reserve account ('DSRA'), which will hold an amount equivalent to two Quarterly outstanding interest payments throughout the life of the Instrument, on a rolling basis (c) Exclusive lien on a Debt Payment Account ('DPA'), which will be funded 7 working days prior to the payment date. IZP “the Guarantor” is an innovative, for-profit credit enhancement guarantee company, conceived and designed to issue guarantees for promoting private infrastructure projects. IZP leverages the prior experience of InfraCo Asia and GuarantCo in supporting infrastructure projects in Pakistan, as well as Karandaaz’s local market knowledge and track record of investments focused on supporting financial inclusion. IZP has been assigned the long-term rating of “(AAA)” by PACRA. IZP, the Guarantor, is a forward-thinking, for-profit credit enhancement guarantee firm created to provide guarantees for advancing private infrastructure projects. Drawing from InfraCo Asia and GuarantCo's expertise in supporting Pakistani infrastructure projects, along with Karandaaz's local market insight and investment history focused on enhancing financial inclusion, IZP is uniquely positioned to drive infrastructure development. During 1QFY24, Kashf's net mark-up income remain stagnant and clocked at ~PKR 10.5bln (FY23: ~PKR 10.5bln) while Profit after tax stood at ~PKR 1.8bln (FY23: ~ PKR 2.5bln) and equity stood at PKR 12.2bln (FY23: PKR 10bln).
Ratings depend on the foundation's ability to maintain positive asset health indicators and monitor the impact of technological advancements on operational and risk efficacy.

About the Entity
Kashf Foundation ("Kashf") was incorporated with SECP in 2007 as a Public Company Limited by Guarantee. The overall control of the foundation vests in ten members Board of Directors. Dr. Hafiz Ahmed is the Chairman of the board. Ms. Roshaneh Zafar is the founder and CEO of Kashf. In Feb'24, the rating of Kashf Foundation was upgraded from "A-" to "A".

About the Instrument
Kashf Foundation issued a Rated, Secured, Privately Placed, DSLR Listed Term Finance Certificates amounting PKR 2.483bln on 8th Dec-23. The TFC has a tenor of 3 years and carries a profit rate of 3MK + 1.5% p.a to be paid quarterly in arrears. The TFC's quarterly principal repayments shall commence from the fifteenth month, in eight equal installments. The TFC is categorized under "Gender Bond" as it is meeting the criteria for use of proceeds as given under the guidelines eligible to issue gender bond. The utilization of the proceeds would be such that 70% of the proceeds shall be utilized to issue micro-infrastructure-finance loans directed towards the welfare of women via entrepreneurship, business support, flood rehabilitation education, and 30% to meet working capital requirements. The two interest payments of PKR 144mln and PKR 143mln have been made at the end of Mar'24 and Jun'24 respectively.