KARACHI, Dec 26: United Bank Ltd is structuring and advising Rs990 million three-year listed term finance certificates backed by present and future receivables of Paktel Limited.

This is going to be an asset backed securitization under which Paktel will sell a portion of its present and future receivables and other revenues to SPV Ltd constituted to facilitate the said transaction.

According to a press release Paktel, SPV and UBL have signed an agreement to this effect last week. Under this agreement the SPV will finance the sale price for the purchased receivables by issuing redeemable capital in the form of listed TFCs. The TFC holders will be secured by the SPV through hypothecation of purchased receivables sold to the SPV.

Pakistan Credit Rating Agency has assigned instrument rating of single A to the proposed TFC. It denotes low expectation of investment risk and a strong capacity for timely redemption of principal and payment of expected profit.

The TFC issue comprises TFCs-A and TFCs-B worth Rs840 million and Rs150 million respectively. The total TFC issue comprises a pre-IPO of Rs790 million and a public offering of Rs200 million. The pre-IPO has been oversubscribed and the IPO is expected by the end of January 2003. The TFC has a tenor of three years with a floating profit having a floor and a cap.

Paktel is currently offering cellular services in 38 cities of Pakistan and has a strong brand franchise value.