June 13, 2019 (MLN): BankIslami Pakistan Limited is issuing Ehad Sukuk Certificates, which are fully paid up, rated, perpetual, unsecured, subordinated, non-cumulative and contingent convertible listed Mudaraba Sukuk Certificates, and will qualify as Additional Tier 1 Capital (ADT-1). The issue is of up to Rs. 2 billion, inclusive of a Green Shoe Option of Rs. 500 million
The issue amount is expected to contribute towards BankIslami’s Additional Tier 1 Capital for capital adequacy ratio as per guidelines set by State Bank of Pakistan. The funds so raised will be utilized in the Bank’s financing and investment activities (general pool) as permitted by its Memorandum & Articles of Association.
The Sukuk Certificates being issued have been assigned a rating of “A-” by the Pakistan Credit Rating Agency, and will carry a floating rate coupon priced at a spread of 275 BPS over three-month KIBOR.
Profit will be payable monthly in arrears on the outstanding investment amount. The first such profit payment will fall due at the end of 1st calendar month end from the Issue Date and subsequently every month end thereafter. The profit should only be paid from the relevant month’s attributable profit of the general pool. The Sukuk shall be subject to loss absorbency clauses as stipulated in the BPRD Circular.
A trustee shall be appointed to secure the interests of the investors and the Sukuk shall be listed on the Pakistan Stock Exchange via Initial Public Offering, thereby creating liquidity for the investors. In addition, JS Global Capital Limited has been appointed as the Market Maker to the Issue.
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