ISLAMABAD: Pakistan has mopped up another $1 billion by selling bonds in international market on July 6, 2021. This transaction was reopening of 3-tranche bonds initiated in March.
Pakistan sold $300 million tranche due in 2026 at 5.875%; $400 million in bonds to be matured in 2031 at 7.125%; and $300 million in paper due in 2051 at 8.45%. According to Finance Ministry’s documents, Credit Suisse, Deutsche Bank, Emirates NBD Capital, JPMorgan and Standard Chartered facilitated this transaction. The bonds were tightened from initial price guidance of 6%-6.125% for the notes due in 2026, around 7.375% for the tranche maturing in 2031 and around 8.75% for the paper due in 2051, after they drew more than $3 billion in combined orders.
Worth noting is that the March transaction had attracted $5.3 billion in orders and was 2.1 times oversubscribed. Pakistan was able to cut its cost of funding by 12.5 basis points (bps), 25 bps and 30 bps for each respective tranche .
The March transaction’s five-year tranche launched at 6%, the 10-year paper at 7.375% and the 30-year notes at 8.875%.
Pakistan, which has Fitch and S&P ratings of B-(minus) and a Moody’s rating of B3 – all considered “junk”, has set a 4.8% GDP growth target for the year that began on July 1, after growth of 3.96% in the 2020/21 financial year.
