JCR-VIS assigns rating to Pakistan’s First Basel 3 compliant Tier 1 Sukuk by Meezan Bank Limited
Karachi, June 05, 2018 (PPI-OT): JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned preliminary rating of ‘AA-’ (Double A Minus) to Meezan Bank Limited’s (MBL) proposed Basel 3 compliant Tier-1 Sukuk. Outlook on the assigned rating is ‘Stable’. Rating will be finalized upon review of signed legal documents.
MBL is in the process of issuing Pakistan’s first privately placed/ OTC Listed, perpetual, unsecured, subordinated, non-cumulative and contingent convertible Shariah compliant Sukuk amounting up to Rs. 7.0b. The issue proceeds will contribute towards the bank’s additional Tier-1 (ADT-1) capital and will be utilized towards enhancement of the bank’s business operations. MBL’s ADT-1 instrument will rank ahead of claims of ordinary shareholders. Ratings also reflect relative risk of the ADT-1 instrument including profit servicing from only earnings for the year, conversion feature in the event of pre-specified trigger events, lock-in clause and point of non-viability in terms of regulatory requirements.
The assigned instrument rating draws comfort from the sound risk profile of MBL. JCR-VIS has assigned entity ratings of AA+/A-1+ (Double A Plus/A-One Plus) to MBL indicating high credit quality and adequate protection factors. The assigned ratings reflect the Bank’s dominant position in the Islamic Banking Industry, increasing market share, healthy customer franchise and strong financial risk profile.
For more information, contact:
JCR-VIS Credit Rating Company Limited
VIS House, 128/C,
25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi