January 28, 2021: In a very encouraging development for the debt market of Pakistan, an innovative, new debt instrument has been issued and listed on the Pakistan Stock Exchange (PSX) by Bank Alfalah (BAFL). Bank Alfalah has issued a Medium Term Note in the form of Term Finance Certificates (Tranche Series-A) of PKR 11,000 million through the Shelf Registration Program, which have been listed on the Exchange as of today, January 28, 2021.
A Gong Ceremony was held at Pakistan Stock Exchange to mark the listing of the instrument. The gong was struck by the CEO of Bank Alfalah, Mr. Atif Bajwa, amidst the presence of the Members of the PSX Board, the MD & CEO of PSX, Mr. Farrukh H. Khan, and senior management of PSX, SECP and BAFL. Also present at the occasion were the senior management and representatives of Arif Habib Limited & Alfalah CLSA Securities, Joint Lead Managers & Arrangers to the Issue.
In his opening remarks, Mr. Farrukh Khan, the MD & CEO of PSX said, “It is indeed a very welcome and positive development for the debt market of Pakistan that Bank Alfalah has issued & listed its Tranche Series-A TFCs of Rs 11 Bn on the Exchange. Bank Alfalah has always been innovative whereby for the first time a shelf prospectus against the issuance of Rs 50 Bn TFCs has been approved. Bank Alfalah has a presence in both the brokerage and asset management industries and has recently become the first Market Maker of debt securities as well. I am very pleased that they are making their mark yet again on PSX through this innovative debt instrument, which will help provide depth and dynamism to the debt sector of the capital market of Pakistan”.
On this occasion, the CEO of Bank Alfalah, Mr. Atif Bajwa, stated, “Bank Alfalah would like to thank SECP and PSX for their continued efforts in promoting the capital markets of Pakistan. Our debt capital markets are still at a nascent stage and we appreciate the efforts of all the stakeholders to develop this market based on global best practices. Sharing the same vision, we at Bank Alfalah believe that an efficient and well-developed debt market will open up additional avenues for corporates and investors for sources of funding and investments respectively”.
Speaking on the occasion, Mr. Arif Habib, Chairman – Arif Habib Group, stated, “I congratulate Bank Alfalah on the successful issuance of their Medium-Term Note. I also congratulate the SECP and Pakistan Stock Exchange for successfully facilitating issuers. There was a time when we, as Consultants, would approach the SECP or the Stock Exchange for the facilitation of a new issue but, since the last two years, we have not felt the need to make the first call for new issuances. The SECP and the Stock Exchange would already be standing with us to facilitate issuers on the equity and debt sectors of the capital market”.
Congratulating Bank Alfalah on the successful issuance of their new debt instrument, Mr. Sulaiman Mehdi, Chairman of the PSX Board, stated, “It is a proud moment for our capital market that the first tranche of Rs 11 Bn of the debt issued by Bank Alfalah has already been oversubscribed. Bank Alfalah was also the first bank to be the Market Maker in Pakistan. It surely reflects upon their commitment to Pakistan’s debt market and their innovative thinking”. He further stated, “It is for the first time that we are seeing such close coordination between State Bank, SECP, PSX, and the entire financial industry; all are working towards reforms and development of the capital market. I congratulate not only Bank Alfalah but also all the market participants and stakeholders who worked in tandem to bring about this innovative product on the debt market successfully”.
In his congratulatory note, Chairman, SECP, Mr. Aamir Khan, stated, “The launch of the first Medium Term Note Program has come about mostly due to the visionary leadership at Bank Alfalah but it is also heartening to see the combined efforts by all stakeholders in this regard. This issue is a very good omen for the future of debt capital market of Pakistan as recent changes in National Savings Schemes to restrict institutional investors have left the field wide open”. He further stated, “A well-developed corporate bond market is essential for the growth of the economy and currently the size of listed corporate debt market in Pakistan stands at less than 1% of GDP. It is in this backdrop, that Bank Alfalah’s MTN will encourage other market participants to tap the capital markets for their liquidity needs and foster competition in the market”.
In his remarks on the new debt issued by Bank Alfalah, Mr. Shauzab Ali, Commissioner SECP, stated, “While looking at the new debt instrument issued by Bank Alfalah and their record in developing the debt market, I am very happy to note that they have offered so much to the investors and have set high standards as role models for others to follow”.
Mr. Ali Sultan, Group Head – Global Treasury & Capital Markets at Bank Alfalah, added, “We have always strived for innovation and are proud that BAFL MTN is the first time in Pakistan that a shelf prospectus has been approved for issuance of TFCs. We are encouraged to continue with our efforts, given the strong response and oversubscription of the transaction which attracted a diverse investor base including Employee Funds, Foundations, Corporates and non-banking institutions”.