The Pakistan Credit Rating Agency Limited
16-Feb-24
Analyst
Uswa Sikandar
uswa.sikandar@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
- Methodology | Rating Modifiers | Apr-23
- Methodology | Financial Institution Rating | Oct-23
- Methodology | Debt Instrument Rating | Dec-23
Related Research
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PACRA Withdraws Instrument Rating of Bank Alfalah Limited | TFCs | Series A | Redeemed
| Issuer | Bank Alfalah Limited |
| Instrument | TFC Series A |
| Amount | PKR 11000 mln |
| Issuance Date | 15-Jan-21 |
| Tenor | 3 Years |
| Redemption Date | 15-Jan-24 |
| Outstanding Amount | - |
| Rating Type | Debt Instrument | |
|
Current (16-Feb-24 ) |
Previous (16-Feb-23 ) |
|
| Action | Redeem | Maintain |
| Long Term | - | AAA |
| Short Term | - | - |
| Outlook | Stable | |
| Rating Watch | - | - |
About
the Entity
Bank Alfalah (the "Bank" or "BAFL"), established in 1992, has undergone impressive growth to emerge as a prominent private commercial bank in Pakistan. With an extensive network spread over 225 cities in Pakistan, encompassing 942 branches (including conventional, Islamic, and foreign branches), ATMs, and CDMs/CCDMs. The majority ownership of BAFL lies with the Abu Dhabi Group, holding a stake of 56.16%. Other stakeholders include Mutual Funds, NBFCs, FIs, DFIs, individuals (43.70%), and executives (0.14%). The Abu Dhabi Group comprises prominent members of UAE's ruling family and leading businessmen with investments globally, including Pakistan, Bangladesh, and the Middle East.
About
the Instrument
The Bank issued Rated, Secured, Listed, Redeemable Term Finance Certificates (TFCs), having total Issue Size of PKR 11bln. The tenor of TFC was 3 years bearing profit rate of 9.03% per annum, payable semi-annually in arrears on the outstanding principal amount, based on 365 days a year and on non-cumulative basis. Interim Coupon Payment equaled to profit on investment amounts by each investor from date on which such investment amounts were received by Issuer until the date which was one day prior to Issue Date. The issued TFC was maintaining a strong lien over GoP issued securities - T-Bills, PIBs (Fixed & Floating). The maturity of the pledged securities was higher than the duration of the Instrument consisting of 10 Year PIBs (floater) (Issue Date: 9th August 2018, Maturity Date: 9th August 2028). The pledged securities were lien marked in favor of the TFC holders which was also mentioned in the Investor’s agreement and Prospectus. The charge on the pledged securities was registered with SECP. The instrument went into maturity on January 15, 2024, and the Bank repaid the entire principal and interest amount due thereon.
Subsequent to the redemption of the instrument of Bank Alfalah Limited | TFCs | Series A, the Pakistan Credit Rating Agency (PACRA) has withdrawn the rating of the said instrument.