Karachi: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has reaffirmed the fund stability rating of Namco Income Fund (NIF) at ‘A(f)’ (Single A (f)).
The rating incorporates the credit quality of existing exposures carried in the fund. At end-August 2011, around 80% of total assets of the fund were invested in instruments/entities rated ‘AA-’ or higher.
Around 16% of total assets at end-August 2011 represented exposure in a recently restructured debt instrument, which has been performing subsequent to its restructuring. Moreover, based on the operational investment policy of the fund, 85% of net assets are required to be invested in ‘A’ or above rated exposures.
Price risk emanating from interest rate movements is considered limited with weighted average maturity of the fund targeted to remain below 60 days. However, as marketability of a restructured instrument is low, price risk emanating from the same is deemed high.
Return of the fund has lagged behind its benchmark and peer group in FY11 on account of provisioning against non-performing assets. Given the reversal against the performing restructured instrument, return has witnessed improvement in the on-going year.
Fund size of NIF has remained low on account of redemptions during the year; net assets of the fund stood at Rs. 92m at end-August 2011. Investor profile of the fund features concentration with holding of top ten investors representing 98% of outstanding units.
The holding of AMC in the fund is also significant at 71%. Barring the low marketability of restructured instrument, liquidity profile of remaining exposures carried in the fund is considered sound and is reflective of the ability of the fund to meet redemptions.
For more information, contact:
Mr. Javed Callea
JCR-VIS Credit Rating Company Limited
Tel: +9221 35311861 (10 lines) (Ext: 501)
Fax: +9221 35311872-3
E mail: firstname.lastname@example.org