Summary The government has planned to sell conventional and sukkuk bonds in the financial markets
(Dunya News) – Pakistan government has decided to sell bonds in global financial capital market hoping to raise around 2 billion dollars.
The government has planned to sell conventional and sukkuk bonds in the financial markets raising more than 2 billion dollars. For this purpose, it would start road shows from Wednesday in Dubai, London, Boston and New York.
The road shows would be completed within one week after completion the size and return on bonds would be ascertained.
According to leading financial analysts, the bonds are likely to set an interest rate or rate of return for bond holders in the range of 6.75 to 7.25 percent. There is likelihood that following the interest of the bond holders, the government is likely to sell euro bonds for a period of 30 years.
It should be noted that Pakistan’s credit rating has remained stable and improved during the last few years. International credit rating agencies, Moody, Fitch and Standard & Poor (S&P) rate Pakistan as B3 (stable), B (stable) and B (stable) respectively.
The most recent update from S&P dated October 30, 2017 states that S&P does not expect Pakistan’s external and fiscal situation to deteriorate materially from current levels and that Pakistan’s economic prospects remain favorable.
Earlier today, S&P has assigned preliminary B rating to Pakistan’s proposed dollar bond issue.
Comparable bonds of other countries have recently floated as followed: Iraq (S&P: B-) raised 6-year bond of $1 billion at 6.75%; Ukraine (S&P: B-) issued 15-year bond of $3 billion at 7.375%; Ghana (S&P: B-) raised 15-year bond of $750 million at 9.25% and Turkey (S&P: BB) raised 10-year bond of $2 billion bond at 6.15%.
