Bank Alfalah Wednesday launched the first-ever perpetual, listed Additional Tier-1 Term Finance Certificate (ADT1) TFC at the Pakistan Stock Exchange (PSX). Addressing the launch and closing bell ceremony, chief guest Sindh Governor Muhammad Zubair said PSX has crossed every major milestone during last four years. He said PSX has attracted global investors due to continuity of better economic policies.
"Investors around the globe believe in the continuity of political process in the country." He said indicators of booming economic conditions would be visible after general elections 2018. "Whosoever forms the government after elections, the digits would reflect the strengthened economy," he added.
Arif Habib Group Chairman Arif Habib said issuance of the instrument is 'badly needed' for the Pakistan's market and Bank Alfalah has taken lead in this regard. President and CEO of Bank Alfalah, Nauman Ansari said his bank believes in innovation, adding that other banks should also be encouraged to get their instruments listed at PSX.
PSX Chairman Muneer Kamal said issuing perpetual bond shows the incredible growth of the Bank Alfalah. He said that banking sector of Pakistan is growing on good pace. Bank Alfalah ADT1 TFC, currently a market novelty, is the first instance of raising capital through a listed Additional Tier-1 instrument in Pakistan, a positive step in Pakistan's nascent Debt Capital Market (DCM).
Bank Alfalah has taken the lead in DCM issuance, cognizant of the critical role played by the market in the development of the financial industry and the economy at large.
The bank had previously listed its Tier-II issuance on PSX and has once again listed its ADT1, a testimony to the bank's continued commitment to the development of the debt market. The Rs 7 billion ADT1 will improve Bank Alfalah's Tier-1 capital base, better meeting Basel III requirements and catapulting the bank into an era of exponential growth.
The ADT1 instruments, or as they are known internationally, Contingent Convertible Bonds (CoCos), were developed post-2008 global financial crisis. As international banks were grappled with the catastrophe, an instrument was developed for better capitalization in accordance with the Basel III accord to fend off future crises.
This was achieved through a truly participatory instrument with distinguished features: perpetual tenor, non-cumulative, discretionary coupon payments and loss absorption. In its concluding remarks, PSX Managing Director Richard Morin said he has plans to unlock true development of the capital market.
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