PACRA Assigns Preliminary Rating to U Microfinance Bank Limited - TFC - PKR 5,000 million - Press Release issued by The Pakistan Credit Rating Agency Limited.

Lahore -- December 21, 2021 (PPI-OT)

Following is the text of press release issued by The Pakistan Credit Rating Agency Limited (PACRA)


The rating of the TFC reflects the coverage of the instrument through the security structure - 50% of the Issue Amount will be secured against pari passu charge on the Issuer's Book Debts, Advances and Receivables with 25% margin. Whereas, 50% of the Issue amount is secured against lien on government securities of a similar tenor. In case the Issuer fails to make the Profit/Principal payment on the relevant due date, the Security Agent reserves the right to realize the cash from the government securities placed under lien with the security agent and make payment including principal and interest as falling due to the relevant investor within 05 days of the relevant due date without invoking Event of Default.

U Microfinance Bank Limited (UMBL) is a fast-growing player in the Microfinance Sector (End-Jun'21: 9.8%, End-Dec'20: 9.3% market share in total Gross Loan Portfolio). The Bank's ambitious growth strategy encompasses multi-faceted targets focused towards achieving growth in the retail banking segment, developing digital banking platform and building a wholesome treasury book. The Bank's funding needs are primarily fostered through a growing deposit base, coupled with sizable borrowings. Sponsor support...

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