Meezan Bank to launch Rs7bln sukuk

KARACHI: Meezan Bank Limited is set to issue Rs7 billion worth of Sukuk bond to raise capital for business operations, a bourse filing said on Wednesday.    The issuance is expected next month after the regulatory approval.

“The board of directors of Meezan Bank Limited… approved the issuance of a privately placed, rated, unsecured and subordinated Tier-II eligible Sukuk issue of Rs7 billion as an instrument of redeemable capital under section 120 of the Companies Ordinance, 1984 in compliance with the Basel III Guidelines…,” the bank said in a notification sent to the Pakistan Stock Exchange. “The funds raised from the issue will be utilised for the bank’s business operations as permitted by its memorandum and articles of association will raise bank’s capital adequacy ratio.”

Meezan Bank has already obtained a principle approval of the SBP to issue the sukuk. “Final approval is pending completion of legal and regulatory formalities,” the bank said.

An official of the Meezan Bank said sukuks have become significant tools in raising capital. “It’s important to issue bonds to keep the aggressive growth trajectory up of the growing Islamic banks,” he said.