Press Release

VIS Assigns Preliminary Rating of AAA to the Proposed Basel 3 compliant Tier 2 Sukuk (Sukuk 4) of Meezan Bank Limited
 

Karachi, November 24, 2021: VIS Credit Rating Company Ltd. has assigned preliminary rating of ‘AAA’ (Triple A) to planned Tier II Sukuk (Sukuk 4) issue of Meezan Bank Limited (MBL). Outlook on the assigned rating is ‘Stable’. The medium to long-term rating of ‘AAA’ denotes highest credit quality, with negligible risk factors, being only slightly more than for risk-free debt of Government of Pakistan (GoP).

MBL plans to raise its third Shariah Compliant Tier II Capital of upto Rs. 10b (inclusive of a Rs. 3b green shoe option) by way of issuing Mudarabah based Sukuk Certificates. The Issue will be unsecured & sub-ordinated. Tenor of the issue is 10 years and repayment structure is bullet payment at the end of the tenor. The arrangement involves recalling the Sukuk 1, issued previously on September 22, 2016 amounting to Rs. 7b, and issuing fresh Sukuk. The Issue shall contribute towards MBL’s Tier II Capital for complying with the Capital Adequacy Ratio (CAR) requirements prescribed by SBP under its Basel III framework. The Issue proceeds will contribute towards the Bank’s Tier-2 capital and will be utilized towards enhancement of the bank’s business operations.

The outstanding entity ratings of MBL were upgraded on June 30, 2021, to ‘AAA/A-1+’. Based on the revision of ratings, the outstanding ratings of Tier II Sukuk (Sukuk 1 and Sukuk 3) and ADT I Sukuk (Sukuk 2) are being reassessed at ‘AAA’ (Triple A) and ‘AA+’ (Double A Plus) respectively.

For further information on this rating announcement, please contact the undersigned (Ext: 201) at 92-21-35311861 or fax to 92-21-35311873.


Javed Callea
Advisor

Applicable rating criterion: Commercial Banks Methodology - June 2020
https://s3-us-west-2.amazonaws.com/backupsqlvis/docs/Meth-CommercialBanks202006.pdf
Rating the Issue - November 2021
https://docs.vis.com.pk/docs/Notchingtheissue202007nov.pdf

________________________________________________________________________________________________________________________________
Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2021 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

VIS Credit Rating Company Limited