KARACHI - The Pakistan Credit Rating Agency (PACRA) has maintained the long-term rating of AA (Double A) and the short-term rating of A1+ (A one plus) of Allied Bank Limited (ABL). PACRA has also assigned a rating of AA- (Double A minus) to the proposed unsecured, subordinated TFC issue of up to Rs 3,000 million by ABL. These ratings denote a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments. The ratings reflect ABLs good performance prospects emanating from its extensive outreach, sound capital structure and initiatives to tap growth. While seeking to strengthen its infrastructure and control environment, the management intends to withstand in an increasingly competitive environment through achieving diversification in loan book and leveraging expansion and low cost deposit mobilisation. Allied Bank plans to issue listed, unsecured, subordinated TFCs of up to Rs 3,000m for a tenure of 10 years. The profit payment, to be made semi-annually in arrears, will be based on 6 months KIBOR plus 85bps for the first 5 years of the TFC Issue, and 6 months KIBOR plus 130bps from the start of 6th year. The instrument is structured to redeem 0.02pc of the principal at every repayment date, with the remaining principal to be redeemed at maturity through a bullet repayment. The TFCs have a call option, exercisable on any profit payment date starting 60th month from the issue date.