Press Release

VIS Reaffirms Ratings of Basel 3 Compliant Tier-II (TFC-I) Instrument of U Microfinance Bank Limited

Karachi, June 10, 2024: VIS Credit Rating Company Limited (VIS) has reaffirmed the rating assigned to TFC-I (Basel 3 Compliant Tier-II debt instrument) of U Microfinance Bank Limited (‘UMBL’ or the ‘Bank’), at ‘A’ (Single A). 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 600.0 million through the issuance of rated and unsecured Term Finance Certificates (TFCs) valued at Rs 5,000 each to Pak Oman Investment Company in June 2017. This funding was secured as Tier-II subordinated debt and was included in the Bank’s supplementary capital. The TFCs had a tenure of 7 years, maturing in June 2024, with an interest rate set at 6M KIBOR + 3.50%. As of now, the outstanding amount on the TFCs is Rs 149.7 million.
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

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