Karachi, March 01, 2017: JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned preliminary rating of ‘BBB+’ (Triple B Plus) to the proposed Privately Placed, subordinated Term Finance Certificate (PPTFC) issue of U Microfinance Bank Limited (UMBL). Outlook on the assigned rating is ‘Stable’. The entity rating of UBML is ‘A-/A-2’ (Single A Minus / A-Two) with a ‘Stable’ outlook.
UMBL plans to issue a PPTFC for a tenor of 7 years with an issue amount of Rs. 600m. The PPTFC will contribute towards UMBL’s TIER II capital for Capital Adequacy Ratio (CAR) as per guidelines set by SBP. Principal repayment of the issue will be in four semi-annual installments after a grace period of 5.5 years while interest will be charged on semi-annual basis at the rate of 6-month KIBOR plus 3.5%. The PPTFC will be unsecured, subordinated as to payments of principal and profit to all other indebtedness of the bank including deposits. The PPTFC carries a lock-in clause as well as loss absorbency as required under Basel III criteria for regulatory capital.
For further information on this rating announcement, please contact the undersigned at 021-35311861-70 (Ext: 234) or Mr. Waqas Munir, FRM at 042-35723411-13 (Ext: 8010).
Applicable Rating Criteria:
Microfinance Banks (May 2016)
Notching the Issue (June 2016)
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