BankIslami begins Tier 1 Sukuk

KARACHI: BankIslami Pakistan Limited on Monday announced the country’s first initial public offering (IPO) of Additional Tier 1 Modarba Sukuk under the brand name “BankIslami Ehad Sukuk” for listing and trading at the Pakistan Stock Exchange (PSX), a statement said.

“Total size of Sukuk Issue is Rs2 billion out of which Rs1.7 billion has already been subscribed by Pre-IPO investors, including 27 prestigious institutions of the country and 45 high net worth individuals,” the statement said.

The Sukuk offers monthly profit payment at an attractive expected profit rate of 2.75 percent over three months Karachi Interbank Offered Rate (KIBOR). The rating of Sukuk is ‘A-’ assigned by PACRA, while long-term and short-term rating of the bank is ‘A+’ and ‘A1’, it added.

Public subscription dates for Rs300 million IPO are Monday, April 20 and Tuesday April 21, 2020. Minimum investment amount is Rs5,000. Next Capital Limited is acting as consultant to the issue whereas JS Global Capital Limited is the joint advisor and arranger, and designated market maker.

The IPO is fully underwritten by Next Capital Limited and Arif Habib Limited. In addition to BankIslami, 10 more banks have been appointed as bankers to the issue to receive the Sukuk subscription. Further, to facilitate and promote online subscription, the eIPO services of the Central Depositary Company (CDC) and UBL have been obtained.