VIS Maintains ‘A’ Rating for U Microfinance Bank’s Debt Instrument Amid Economic Shifts

Karachi, VIS Credit Rating Company Limited (VIS) has reaffirmed its ‘A’ rating for the Basel 3 Compliant Tier-II debt instrument (TFC-I) of U Microfinance Bank Limited (UMBL), indicating good credit quality with stable outlook. This reflects the bank’s ongoing stability and adherence to regulatory capital requirements amid economic fluctuations.

According to VIS Credit Rating Company Limited, UMBL successfully raised Rs 600 million in June 2017 by issuing Term Finance Certificates (TFCs) to Pak Oman Investment Company. These TFCs, valued at Rs 5,000 each, were structured as unsecured Tier-II subordinated debt, enhancing the bank’s supplementary capital. The instruments, set to mature in June 2024, were issued with an interest rate pegged to 6M KIBOR + 3.50%. As of the current review, the outstanding amount on these TFCs stands at Rs 149.7 million. The reaffirmation of the ‘A’ rating reflects the bank's consistent management and financial strategy in line with economic trends and regulatory requirements.