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

Applicable rating criterion: Commercial Banks Methodology - June 2020
Rating the Issue - November 2021

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