Moody’s downgrades Mobilink’s ratings, outlook negative

Company still rated two notches above Pakistan.

HONG KONG: Moody’s has downgraded the corporate family rating of Pakistan Mobile Communications Limited (Mobilink) to B2 from B1 and the senior unsecured rating to Caa1 from B3, according to a statement on their website.

Moody’s has also changed the ratings outlook to negative from stable.

These rating actions follow Moody’s decision to downgrade Pakistan’s foreign- and local-currency bond ratings to Caa1 from B3, with a negative outlook, on 13 July.

Moody’s believes that since Mobilink is predominantly a domestic entity, with substantially all of its revenues derived from, and assets based in, Pakistan, its fundamental creditworthiness needs to closely reflect the potential risks that it shares with the sovereign.

Moody’s stresses that the rating action is not an indication of any deterioration in Mobilink’s credit fundamentals. “We continue to take into account Mobilink’s strong fundamental credit quality by rating its B2 corporate family rating two notches above the sovereign rating. We expect it to maintain its leading market position in the growing mobile market in Pakistan and keep strong financial metrics for its rating level,” says Yoshio Takahashi, a Moody’s Assistant Vice President.

Mobilink spokesperson Hussain Ali Talib said that this was purely because of the downgrade in Pakistan’s rating, “Recently Pakistan’s Moody’s rating has came down and this downgrading has effects on all companies working in Pakistan too.

Mobilink’s rating is directly related to the rating of Pakistan, and this downgrade is due to the country’s over all downgrading, and is not a reflection of Mobilink’s operations.”

Talib also said that ss per policies of Moodys no company operating in Pakistan can be rated more than two levels above the country’s rating, so Mobilink still has the best possible rating for any Pakistani company.

Published in The Express Tribune, July 17^th, 2012.