Govt selects two financial advisors syndicate to raise $2b from Eurobond/Sukuk bond

ISLAMABAD: To raise $2b via Euro and Sukuk bonds for easing balance of payments position, the government has decided to appoint two syndicates of financial advisors.

Financial bids for the Euro and Sukuk bonds were opened on Tuesday, reported Express Tribune. For the eurobond group of financial advisors, Citibank, Standard Chartered Bank, Deutsche Bank and Industrial and Commercial Bank of China (ICBC) have been selected to arrange this transaction.

Pakistan intends to raise $1b through the Eurobond although it intends to pitch a minimum $500m bond, said officials.

For the issuance of Sukuk bond, Citibank, Deutsche Bank, Standard Chartered, ICBC, Dubai Islamic Bank and Noor Bank JSPC have been selected as financial advisors. Even for this bond, the government will pitch a minimum of $500m but wants to raise $1b, according to officials.

For the issuance of Sukuk bond, the M3 motorway is being offered as collateral by the government. By the issuance of these two bonds, it is expected that $2-$3b could be raised, said a banking official.

According to officials, ICBC and DIB had provided the lowest financial bids which was said to be 1.5pc lesser than that tendered by three-Europe based banks and were directed by finance secretary to match these rates to become part of the syndicate.

The finance ministry wasn’t making the selection of financial advisors’ syndicate public as it awaits a written confirmation from three European-based banks to match the lowest bid, said officials.

Due to available liquidity in the international markets, the government was expecting better pricing, but the political turmoil could eventually impact the overall price, said officials.

November 15th date has been set to close these transactions and Pakistan’s external sector position has greatly eroded due to a ballooning current account deficit which touched $3.6b during the first quarter (July-September) of FY 2017-18, rising 117pc compared to same period last year.

 

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