PMRC launches Rs3.1bn sukuk for housing finance

KARACHI: Pakistan Mortgage Refinance Company (PMRC) has issued a first of its kind sukuk of Rs3.1 billion at 8.25 percent for the promotion of housing finance in the country, it said on Thursday.

“PMRC and its Partner Financial Institutions (PFIs) have joined hands to strengthen and promote the housing finance market by participating in a Privately Placed sukuk of Rs3.1 billion,” the company said in its statement.

The sukuk was jointly led by Pak Kuwait Investment Company (PKIC) and the Bank of Punjab (BoP). The investors include HBL (Islamic Banking), Askari Commercial Bank (Islamic Banking), Bank Islami, PKIC, BoP (Bank of Punjab), and Karandaaz Pakistan. Meezan Bank Limited has structured this unique sukuk along with PMRC’s Shariah Advisor Mufti Ehsan Waquar and PMRC team. It is the first of its kind and is based on Shirkah-tul-‘Aqd. The PMRC said it would utilise the proceeds of this sukuk for further development of shariah compliant housing/ residential mortgage financing as well as Housing Finance Portfolio (HFP) of eligible Islamic Financial Institutions. Mudassir H Khan, Managing Director/ CEO PMRC said, “I am delighted to say we have brought innovation in Islamic financing and for the capital markets with this sukuk”.

Khan said it would provide opportunities for shariah compliant financing both for consumer as well as the corporate sector.

“I feel proud that PMRC is becoming an important player in development of affordable housing finance particularly low-income housing, he said.

Irfan Siddiqi, President and CEO Meezan Bank in his statement said, “Meezan Bank is pleased to partner with PMRC in structuring this new and progressive sukuk for raising Islamic funds”. Siddiqui said he was confident this would greatly contribute towards increasing accessibility and growth in housing finance.

Ahmad Ali Siddiqui of Meezan Bank said this sukuk would be based on one of its kind shariah compliant structure under which the investors and PMRC would enter into Musharakah Agreement to create Musharakah in the Housing Finance Portfolio. “Profits of Musharakah business shall be shared between Sukuk Holder and PMRC as per their ratio of investment. This is a unique structure which will play a pivotal role in the housing sector,” he said.