PSX Approves Listing of Rs. 200 Billion Energy Sukuk

Pakistan Stock Exchange (PSX) has approved the listing of Pakistan Energy Sukuk-1 of Rs. 200 billion of Power Holding Limited under its privately-placed debt securities’ listing regulations.

According to the notification issued by the PSX, the Sukuk Certificates will be listed on the Exchange from October 24, 2019, and trading will commence one day after the date of the formal listing i.e. October 25, 2019, through Bond Automated Trading System (BATS) and will be settled through National Clearing Settlement System (NCSS) on the T+1 settlement basis.

The notification reads,

Government debt securities which include GoP (Government of Pakistan) Ijara sukuk can also be issued to individual investors and in accordance with the Pakistan Energy Sukuk Rules 2019, individuals shall be allowed to hold the Sukuk issued by PHL (Power Holding Limited). The market lot will be one certificate of face value of Rs. 5,000 each.

The redeemable capital instrument will help the government raise funds to fulfill its financing requirements, including but not limited to the settlement of part of prevailing circular debt related to the energy sector.

Six banks – mandated lead arrangers – committed to underwrite Rs. 190 billion for the subscription of the issue.

  • The top lead arranger is Meezan Bank with underwritten commitment of Rs. 88 billion.
  •  Faysal Bank with an underwritten commitment of Rs. 35 billion.
  • BankIslami Pakistan with an underwritten commitment of Rs. 35 billion.
  • Dubai Islamic Bank Pakistan with an underwritten commitment of Rs. 14.15 billion.
  • MCB Islamic Bank with an underwritten commitment of Rs. 10 billion.
  • Al Baraka Bank Pakistan with an underwritten commitment of Rs. 8.85 billion.
  • Remaining Rs. 9 billion are to be raised from individuals.

The face value of the Sukuk is Rs. 100,000. Moreover, the availability period is up to one month from the signing transaction documents. The availability period will expire during the disbursement by the investors. The Sukuk tenor is up to 10 years starting from the expiry of the availability period.

Semi-annually, in arrears, the first profit payment will be payable at the end of the six months from the expiry of the availability period until the expiry of the tenor. Profit will be calculated on the basis of the actual number of days elapsed in a year on the outstanding facility amount of investors.

The base rate will be 80 bps per annum. In case profit/rental payment is not paid within 30 days of profit payment date, then the issuer will pay an additional amount calculated at 120 basis points per annum.