Trading in Rs8bn Bank of Punjab TFC begins on 23rd

Trading in the privately placed Rs8 billion bond of the Bank of Punjab Ltd (BoP) will commence on the Pakistan Stock Exchange (PSX) on Friday, Dec 23. Locally known as a term finance certificate (TFC), the debt instrument will contribute towards the bank’s Additional Tier 1 Capital for the capital adequacy ratio (CAR). This category of capital consists of instruments that aren’t equity but can be converted into shares in case a trigger event occurs. The bank, which is mainly owned by the Punjab government, will use the funds in its regular business operations, the lender said in the term sheet of the issue. The bond is perpetual in nature, which means there’s no redemption date and bondholders can liquidate their investments in the secondary market at the time of their choosing. The investment will offer a floating rate of six-month Karachi interbank offered rate (Kibor) plus 200 basis points if the bank is compliant with CAR, minimum capital requirement (MCR) and leverage ratio (LR) at the end of a given period.