United Bank Limited (UBL) has executed Pakistan's largest-ever interest rate swap worth Rs75 billion with Jazz (Pakistan Mobile Communications Limited), locking in the telecom giant's borrowing costs and signaling banks' confidence in falling rates.
The deal, finalized on Friday, converts Jazz's KIBOR-linked floating-rate loans (11.5-12.0% at November 2025 reset) into fixed-rate liabilities, shielding the company from rate volatility. Arif Habib Limited noted this enhances Jazz's financial planning and reflects sophisticated corporate risk management.
Jazz CEO Aamir Ibrahim called it proactive hedging for cash flow stability and network investments. UBL CEO Muhammad Jawaid Iqbal said the transaction will accelerate Pakistan's derivatives market growth, showcasing UBL's expertise in complex deals.
Analysts project UBL could earn Rs0.38-1.50 billion annually (pre-tax) from 50-200 basis point rate declines. The swap underscores institutional bets on monetary easing and opens new risk-based income streams for banks beyond traditional lending.
