Press Release
VIS Reaffirms Ratings of Basel 3 Compliant Tier-I (TFC-II) Instrument of U Microfinance Bank Limited
Karachi, June 10, 2024: VIS Credit Rating Company Limited (VIS) has reaffirmed the rating assigned to TFC-II (Basel 3 Compliant Tier-I debt instrument) of U Microfinance Bank Limited (‘UMBL’ or the ‘Bank’), at ‘A-’ (Single A Minus). The long-term instrument rating of ‘A-’ denotes good credit quality; protection factors are adequate. Risk factors may vary with possible changes in the economy. Outlook on the assigned ratings is ‘Stable.’ The previous rating action was announced on April 28, 2023.
The Bank raised Rs 1.0b through the issuance of rated, unsecured, subordinated, privately placed, perpetual, and non-cumulative debt instruments in the form of Additional Tier-I Term Finance Certificates (TFCs) in 2022. These TFCs had a markup rate of 6-month KIBOR + 2.50%, payable semi-annually on a non-cumulative basis on the outstanding amount.
The Bank has the option to call the TFCs at par, either partially or in full, with prior approval from the State Bank of Pakistan (SBP), on any profit payment date starting 5 years from the issue date. The TFCs are subordinated in terms of principal and profit payments to all other claims except common shares. Additionally, these TFCs are convertible into a fixed number of the Bank's ordinary shares upon a Common Equity Tier-I trigger event.
For further information on this ratings announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria:
Micro-Finance Banks
https://docs.vis.com.pk/docs/MicroFinance-Oct-2023.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf