KARACHI, May 23: KESC launches Rs. 2 billion AZM TFCs: Karachi Electric Supply Company has launched the public offering of Pakistan’s first ever Utility Sector Retail Bond Issue, titled: “KESC AZM TFC”. Term Finance Certificates (TFCs) are instruments of redeemable capital as defined under section 120 of the Companies Ordinance. This issue is listed, secured and rated, offered in multiple tenors having a total face value of Rs. 2 billion and is available for subscription to the public for a three month period, starting from May 25, 2012 until August 24, 2012. Investments received will be utilized for financing KESC’s permanent working capital requirements.

The KESC AZM Certificate issue is the most flexible TFC issue in the country, available in maturities of 13 months (KESC AZM TFC 1), three years (KESC AZM TFC 2) and five years (KESC AZM TFC 3). Coupon/ profit rates per annum are 13.00% p.a. payable monthly for the 13 month issue, 14.75% p.a. payable quarterly for the 3 years issue and 15.50% p.a. payable quarterly for the 5 years issue. The total face value of the issue is Rs. 2,000 million including a Green Shoe option of Rs. 1,000 million. Total amount offered is Rs. 300 million, Rs. 1,200 million and Rs. 500 million for 13 months, 3 years and 5 years issue respectively. Minimum investment amount has been fixed at Rs. 10,000 in order to allow for broad based participation in the venture. Principal repayment of the investment would be available at maturity. Early redemption option would also be available to investors subject to varying redemption charges and a 15 day prior notice.

Each AZM TFC is secured by monthly collections from over 700 of KESC's top corporate customers expected to provide over 10 times coverage on average on each monthly payment amount. The security also includes charge on fixed assets. All 3 TFCs have been rated 'AA' (Double A) by PACRA which denotes very high credit quality and a strong capacity for timely payments. KESC has been awarded an Entity rating of 'A-' (Single A minus) by PACRA.

The superior returns, flexible terms and strong instrument rating make the KESC AZM TFCs an attractive investment opportunity. Overseas individuals and institutional investors are also eligible for participation. The Company has launched a dedicated helpline (111-KESC-22/111-5372-22) and a website; in order to facilitate investor queries and information requests. The TFC prospectus and application forms are available on the website.