Moody’s gives Pakistan certificates Caa1

Moody's Investors Service said it assigned a provisional Caa1 senior unsecured rating to the proposed dollar-denominated trust certificates to be issued by Second Pakistan International Sukuk Co. Ltd., a special purpose vehicle established in Pakistan, by the Islamic Republic of Pakistan.

"The Government of Pakistan's sukuk offering reflects the growing interest in Islamic capital markets as a source of sovereign funding and helps support its domestic Islamic Finance sector," Moody’s global head of Islamic finance Khalid Howladar said in a news release.

"Moody's Caa1 government bond rating and stable outlook on Pakistan reflects the country's large but moderating fiscal deficits as well as its stabilizing external liquidity position," Anushka Shah, Moody’s lead sovereign analyst for Pakistan, said in the release. " It also factors in high susceptibility to event risk, both on the political front and in terms of economic vulnerabilities that could arise."

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