Karachi September 26 2022: The Pakistan Stock Exchange is pleased to notify the listing of Privately Placed, Unsecured, Subordinated, Perpetual and Non-Cumulative (AT-1) Term Finance Certificates (TFCs) of PKR 7,000 Million of Bank Al Habib Limited on the Exchange w.e.f. Tuesday, September 27, 2022 pursuant to Chapter 5C of PSX Rule Book, i.e. “Privately Placed Debt Securities’ Listing Regulations”.
Trading in the TFCs will commence from Wednesday, September 28, 2022 through Bond Automated Trading System (BATS) and will be settled through National Clearing Settlement System (NCSS) on T+1 basis.
The TFCs offer a floating coupon rate of 6 months KIBOR plus 165 bps for the period at the end of which the Bank is compliant with Capital Adequacy Ratio, Minimum Capital Requirement and Leverage Ratio. Pak Brunei Investment Company Limited is acting as the Agent to the Issue.
Only Qualified Institutional Buyers (QIBs), as defined in Chapter 5C of the PSX Rule Book, are allowed to trade in the TFCs of the Bank. The Market Lot will be one Certificate of face value of PKR 5,000/- each. The Bank has not appointed a Designated Market Maker for this issue.
The National Clearing Company of Pakistan Limited has assigned the Security Symbol “BAHLTFC9” to the TFCs of the Bank.
The Issue Amount is intended to contribute towards AL Habib’s Additional Tier 1 Capital for Capital Adequacy Ratio (“CAR”) as per guidelines set by SBP. The funds so raised will be utilized in AL Habib’s normal business operations as permitted by its Memorandum & Articles of Association.
PKR 7,000 million, inclusive of a Green Shoe option of PKR 3,000 million, raised by way of private placement with subsequent private placement on Pakistan Stock Exchange Limited.
The Issuer will have full discretion over the amount and timing of profit distribution and waiver of any profit distribution or other payment will not constitute an event of default. Furthermore, upon waiver or cancellation of profit payments, BAHL’s obligation to pay such profit on TFCs shall stand extinguished and the Issuer shall have no obligation to make any further payments in actual or in-kind.
The profit will be paid only from current year’s earnings and will be non-cumulative. Any inability to exercise the non-cumulative feature, will subject the TFCs to mandatory conversion into common shares (subject to the cap specified below) / write-off, at the discretion of SBP.
Bank AL Habib Limited may call the TFCs (either partially or in full), with prior approval of SBP, on any profit payment date on or after five years from the date of issue, subject to not less than 60 days prior notice being given to the investors. The Call Option once announced will not be revocable. As per Clause iv (b) of Annexure 2 of the Circular, the Bank shall not exercise the Call Option unless the called instrument is replaced with capital of same or better quality.
The Instrument will be unsecured and subordinated as to payment of principal and profit to all other claims except common shares.
Payment of profit will be subject to the condition that such payment will not result in breach of the Bank’s MCR or CAR or LR set by SBP from time to time, as per Clause iii (g) of Annexure 2 of the Circular. Any inability to exercise the Lock-in Clause, will subject the TFCs to mandatory conversion into common shares (subject to the cap specified below) / write-off, at the discretion of SBP.
The maximum number of shares to be issued to TFC holders at the Pre-Specified Trigger and / or Point of Non Viability and / or in the case of inability to exercise the noncumulative feature and / or lock-in clause will be equal to the “Outstanding Fair Value of the TFCs” divided by Market value per share of the Bank’s common share on the date of trigger event as declared by SBP, subject to a cap of 118,574,000 (One Hundred Eighteen Million Five Hundred Seventy Four Thousand) shares. Shareholders’ in-principle approval for conversion into common shares was obtained in the Annual General Meeting held in March 2022. Approval of relevant regulatory authorities for conversion into common shares will be obtained in due course.
The instrument will rank junior to all other claims except common shares, but pari passu to other Additional Tier 1 instruments.
