JCR-VIS finalizes rating to Pakistan’s First Basel 3 compliant Tier 1 Sukuk by Meezan Bank Limited

August 24th, 2018

Karachi, August 20, 2018: Upon review of final signed legal documents, JCR-VIS Credit Rating Company Limited has finalized the rating of ‘AA-’ (Double A Minus) assigned to the Tier 1 Sukuk issue of Meezan Bank Limited’s (MBL). Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on June 05, 2018.

MBL has issued Pakistan’s first privately placed, perpetual, unsecured, subordinated, non-cumulative and contingent convertible Shariah compliant Sukuk of 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.

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.