Meezan Bank added another “First” in Pakistan’s Islamic Banking Industry by becoming the Advisor and Lead Arranger for the first ever short-term Sukuk for Kot Addu Power Company Limited (KAPCO). The short term Sukuk which can be termed as an Islamic alternative to Commercial Paper was issued by KAPCO to meet its working capital requirements. This first-of-its-kind issue with a tenor of six months was innovatively structured by Meezan Bank on Musharaka (Shirka-tul-Aqd) basis.
KAPCO is Pakistan’s largest Independent Power Producer with a name plate capacity of 1600 MW. The Company is a AA+ rated entity and is listed in all three Stock Exchanges of Pakistan.
The introduction of short-term Sukuk by Meezan Bank marks the opening of another much needed avenue for Islamic Mutual Funds which faces a scarcity of short-term tradable instruments. The Sukuk received an overwhelming response from investors, mainly comprising of Islamic mutual funds, as can be well judged by over-subscription of more than 50% of the issue size.