Askari Bank Limited has announced it will exercise the early redemption option on its PKR 6 billion Term Finance Certificates (TFCs), known as TFC-VII, following approval from the State Bank of Pakistan.
In a notice to the Pakistan Stock Exchange, the bank stated that its board of directors had approved the use of the call option in a meeting held on April 29, 2025. The early buyback pertains to its subordinated, unsecured Tier II TFCs issued under a trust deed dated December 24, 2019, with Pak Oman Investment Company Limited serving as the trustee.
The State Bank granted formal approval for the call option on July 7, 2025. Askari Bank will now initiate the process to notify the trustee, TFC holders, and meet other statutory requirements in accordance with the provisions of the trust deed.
TFC-VII refers to Askari Bank’s seventh issuance of Term Finance Certificates—a type of debt instrument used by corporations in Pakistan to raise long-term capital. Being Tier II, these instruments are part of a bank’s supplementary capital under SBP regulations. They are typically subordinated and unsecured, meaning they rank below senior debt and are not backed by collateral. TFC-VII was issued in 2019 and carried features that included a call option, allowing the issuer to redeem the certificates before maturity—subject to regulatory approval.
These instruments are frequently used by banks to bolster their capital adequacy ratios, and early redemption often signals improved financial flexibility.
