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WASHINGTON, D.C., June 15 -- The International Finance Corporation (IFC) today signed a joint venture agreement in Pakistan to form the Pakistan Credit Rating Agency (PACRA), the country's first credit rating company. Along with IFC, which is subscribing to a 20 percent stake in PACRA, other shareholders present at the signing ceremony in Lahore included UK-based IBCA Ltd., subscribing to 40 percent of PACRA's equity, and the Lahore Stock Exchange (LSE) subscribing to 30 percent of the equity. The remainding equity has been reserved for employees of PACRA. "IFC's capital markets activities are anchored by efforts to create sound institutions such as PACRA that promote the development of the financial sector," said Mr. Andre Hovaguimian, Director of IFC's Central Asia, Middle East, and North Africa Department. Mr. Khalid A. Mirza, Regional Capital Markets Manager, representing IFC at the signing, stated that "By rendering objective advice and providing debt ratings, PACRA should assist in the development of an
efficient and orderly corporate debt market in Pakistan." IBCA Ltd., Europe's largest credit rating agency, will serve as the technical partner. The local sponsor, LSE, already the second largest stock exchange in the country, has been taking an active role in the development of a debt market to complement Pakistan's equity markets. Not only is the formation of PACRA unique for Pakistan, but it would also represent IFC's first investment in a rating agency in the world. Mr. Khawaja Hamad Saeed, President of the LSE, and Mr. Robin Monro-Davies, Chief Executive of IBCA Ltd., represented their respective institutions at the signing. The Lahore University of Management Sciences (LUMS), which will be providing support to PACRA through its extensive research facilities, was represented by Mr. Syed Babar Ali, Pro-Chancellor and Trusteee, along with several trustees. Also present were representatives of the Corporate Law Authority (Pakistan's securities exchange commission equivalent), Ministry of Finance, State Ban
k of Pakistan (the Central Bank), and prominent members of Pakistan's business and financial community. IFC is the private sector arm of the World Bank Group and is the largest source of multilateral financing for private sector projects in developing countries.
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