JCR-VIS Credit Rating Company Limited

Medium to Long-Term
AAA
Highest credit quality. The risk factors are negligible, being only slightly more than for risk-free
Government of Pakistan’s debt.
AA+, AA, AA
High credit quality. Protection factors are strong. Risk is modest but may vary slightly from time
to time because of economic conditions.
A+, A, A
Good credit quality. Protection factors are adequate. Risk factors may vary with possible changes
in the economy.
BBB+, BBB, BBB
Adequate credit quality. Protection factors are reasonable and sufficient. Risk factors are
considered variable if changes occur in the economy.
BB+, BB, BB
Obligation deemed likely to be met. Protection factors are capable of weakening if changes occur
in the economy. Overall quality may move up or down frequently within this category.
B+, B, B
Obligations deemed less likely to be met. Protection factors are capable of fluctuating widely if
changes occur in the economy. Overall quality may move up or down frequently within this
category or into higher or lower rating grade.
CCC
Considerable uncertainty exists towards meeting the obligations. Protection factors are scarce
and risk may be substantial.
CC
A high default risk.
C
A very high default risk.
D
Defaulted obligations.

Short-Term

A-1+
Highest certainty of timely payment. Short-term liquidity, including internal operating factors
and /or access to alternative sources of funds, is outstanding and safety is just below risk free
Government of Pakistan’s short-term obligations.
A-1
High certainty of timely payment. Liquidity factors are excellent and supported by good
fundamental protection factors. Risk factors are minor.
A-2
Good certainty of timely payment. Liquidity factors and company fundamentals are sound.
Access to capital markets is good. Risk factors are small.
A-3
Satisfactory liquidity and other protection factors qualify entities / issues as to investment grade.
Risk factors are larger and subject to more variation. Nevertheless, timely payment is expected.
B
Speculative investment characteristics. Liquidity may not be sufficient to ensure timely payment
of obligations.
C
Capacity for timely payment of obligations is doubtful.

PACRA's Standard Rating Scale

AAA: Highest credit quality. ‘AAA’ ratings denote the lowest expectation of credit risk. They
are assigned only in case of exceptionally strong capacity for timely payment of financial
commitments. This capacity is highly unlikely to be adversely affected by foreseeable events.

AA: Very high credit quality. ‘AA’ ratings denote a very low expectation of credit risk. They
indicate very strong capacity for timely payment of financial commitments. This capacity is not
significantly vulnerable to foreseeable events.

A: High credit quality. ‘A’ ratings denote a low expectation of credit risk. The capacity for
timely payment of financial commitments is considered strong. This capacity may, nevertheless,
be more vulnerable to changes in circumstances or in economic conditions than is the case for
higher ratings.

BBB: Good credit quality. ‘BBB’ ratings indicate that there is currently a low expectation of
credit risk. The capacity for timely payment of financial commitments is considered adequate,
but adverse changes in circumstances and in economic conditions are more likely to impair this
capacity. This is the lowest investment-grade category.

BB: Speculative. ‘BB’ ratings indicate that there is a possibility of credit risk developing,
particularly as a result of adverse economic change over time; however, business or financial
alternatives may be available to allow financial commitments to be met. Securities rated in this
category are not investment grade.

B: Highly speculative. ‘B’ ratings indicate that significant credit risk is present, but a limited
margin of safety remains. Financial commitments are currently being met; however, capacity for
continued payment is contingent upon a sustained, favorable business and economic
environment.

CCC, CC, C: High default risk. Default is a real possibility. Capacity for meeting financial
commitments is solely reliant upon sustained, favorable business or economic developments. A
‘CC’ rating indicates that default of some kind appears probable. ‘C’ ratings signal imminent
default.

Short-Term Ratings
 
A1+: Obligations supported by the highest capacity for timely repayment.

A1:. Obligations supported by a strong capacity for timely repayment.

A2: Obligations supported by a satisfactory capacity for timely repayment, although such
capacity may be susceptible to adverse changes in business, economic, or financial conditions.

A3: Obligations supported by an adequate capacity for timely repayment. Such capacity is more
susceptible to adverse changes in business, economic, or financial conditions than for obligations
in higher categories.

B: Obligations for which the capacity for timely repayment is susceptible to adverse changes in
business, economic, or financial conditions.

C: Obligations for which there is an inadequate capacity to ensure timely repayment.

D: Obligations which have a high risk of default or which are currently in default.

Standard & poor’s ratings

‘AA’: Very strong capacity to meet financial commitments.

‘A’: Strong capacity to meet financial commitments, but somewhat susceptible to adverse
economic conditions and changes in circumstances.

‘BBB’: Adequate capacity to meet financial commitments, but more subject to adverse economic
conditions.

‘BBB-‘: Considered lowest investment grade by market participants.

‘BB+’: Considered highest speculative grade by market participants.

‘BB’: Less vulnerable in the near-term but faces major ongoing uncertainties to adverse business,
financial and economic conditions.

‘B’: More vulnerable to adverse business, financial and economic conditions but currently has
the capacity to meet financial commitments.
‘CCC’:Currently vulnerable and dependent on favorable business, financial and economic
conditions to meet financial commitments.

‘CC’: Currently highly vulnerable.

‘C’: Currently highly vulnerable obligations and other defined circumstances.

‘D’: Payment default on financial commitments.

Moody’s Long-Term Rating

Aaa: Obligations rated. Aaa are judged to be of the highest quality, with minimal
Credit risk.
Aa: Obligations rated. Aa are judged to be of high quality and are subject to very low
credit risk.
A: Obligations rated. A are considered upper-medium grade and are subject to low
credit risk.
Baa: Obligations rated. Baa are subject to moderate credit risk. They are considered
medium-grade and as such may possess certain speculative characteristics.
Ba: Obligations rated. Ba are judged to have speculative elements and are subject to
substantial credit risk.
B: Obligations rated. B are considered speculative and are subject to high credit risk.
Caa: Obligations rated Caa are judged to be of poor standing and are subject to very
high credit risk.
Ca: Obligations rated. Ca are highly speculative and are likely in, or very near, default,
with some prospect of recovery of principal and interest.
C: Obligations rated. C are the lowest rated class of bonds and are typically in default,
with little prospect for recovery of principal or interest.