JCR-VIS assigns rating to Tier 1 Sukuk by Dubai Islamic Bank Pakistan Ltd

December 07, 2018 (MLN): JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned preliminary rating of ‘A’ (Single A) to Dubai Islamic Bank Pakistan Limited’s (DIBPL) proposed Basel 3 compliant Tier-1 Sukuk. Outlook on the assigned rating is ‘Stable’. Rating will be finalized upon review of signed legal documents.

The assigned rating portrays the relative risk of the ADT-1 instrument wherein issuer has full discretion on coupon payments, profit servicing from only profits for the year and 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 Minus/A-One) to DIBPL indicating high credit quality. The assigned ratings reflect the Bank’s sound asset quality indicators, strong & consistent profitability growth over the last three years and adequate liquidity and capitalization indicators.

Ratings assigned to DIBPL incorporate sound profile of the sponsor, Dubai Islamic Bank (DIB), the largest Islamic bank operating in United Arab Emirates. DIB has been rated ‘A/A-1’ (Single A/A-One) on the international scale. Support from the parent has been witnessed in the past both in the form of financial assistance and technical knowledge transfer and JCR-VIS expects this support to continue going forward.

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