In a bid to keep foreign exchange reserves stable, the government is likely to float much-delayed external bonds worth $1-1.5 billion before February 2021.
About $1.5bn worth of Eurobonds were part of the last fiscal year’s financing plan but were delayed due to adverse market conditions arising out of some arbitration proceedings and the government’s greater focus on the easier option of hot money involving up to 13.25pc mark up that later evaporated.
For the current fiscal year, the government is again eyeing international borrowing through sovereign bonds to meet external debt obligations and sustain forex reserves above a certain level.
According to a report by Dawn, Finance ministry’s spokesperson Kamran Ali Afzal has said bids for the appointment of a lead manager to handle the matter had been received from 10 leading international banks, including all the traditional top-ranked banks.
The spokesperson added that although the target for the Eurobond was around $1bn, its size may go up depending on the bids whereas bond floatation was planned by end of December/early January.
It may be mentioned here that Pakistan’s previous 10-year international bond was currently trading at about 9.89pc, up from about 8pc in May this year against 7pc policy rate of the State Bank of Pakistan (SBP) and rate of inflation at about 8.9pc.
At present, Moody’s credit rating for Pakistan stands at B3 with a stable outlook, while Standard & Poor’s and Fitch Rating place the country at B(negative) with a stable outlook.
