Pakistan sold $2 billion 5-, 10-year Eurobonds

[Saifullah Sani]

Pakistan on Wednesday sold $2 billion worth of five- and 10-year bonds in its first international sale since 2007, the Finance Ministry officials said. The cash-strapped South Asian nation marketed $1 billion of five-year notes at a yield of 7.25 percent and $1 billion of 10-year securities at 8.25 percent, said an official requesting not to be named as the figures would not be officially released until Thursday.

The market rallied after the sale, strengthening the PKR. The sale will also boost reserves and help Pakistan meet International Monetary Fund (IMF) conditions. Last September, the IMF saved Pakistan from possible default by agreeing to lend it $6.7 billion over three years.

The IMF gives each subsequent disbursement after confirming a country is on track with the conditions of the bailout. Pakistan must crack down on rampant tax evasion and broaden the tax base by eliminating tax exemptions and loopholes. Pakistan has received three tranches that total about $1.6 billion from the lender. It has already had to get several waivers for failing to meet the conditions of the loan.

Meanwhile, a spokesman of the Ministry of Finance in a press release issued here on Wednesday said after a period of seven years, Pakistan made a historic return to the international bond market with a $ denominated dual tranche offering aggregating $2.0 billion, raising $1.0 billion each in 5- and 10-year tenors, respectively. The transaction represents the largest-ever international bond offering by Pakistan.

The spokesman said against the initial expectations of raising $500 million, the investor response was overwhelmingly strong and the order-books were oversubscribed across the two tranches, consisting of over 400 orders from high quality investors. The five-year bonds were distributed across all major geographic regions: 59 percent in the US, 19 percent in UK, 10 percent Europe, 10 percent in Asia and 2 percent others. Fund managers took 84 percent of the five-year issue, banks 8 percent, hedge funds 7 percent and insurance company/pension funds 1 percent.

The 10-year bonds were distributed 61 percent in the US, 21 percent in UK, 12 percent in Europe, 5 percent in Asia and Middle East and 1 percent others. Fund managers took 86 percent of the 10-year issue, hedge funds 9 percent, banks 4 percent and insurance company/pension funds 1 percent.

The government of Pakistan conducted extensive global roadshows with two teams covering key financial centers. A team headed by the Finance Minister visited Dubai, London and New York and another team headed by the Finance Secretary, Ministry of Finance visited Singapore, Hong Kong, Los Angeles, San Francisco and Boston. The Pakistan government delegations met directly with a cross-section of several institutional fixed income investors during the four days of roadshows. The teams updated the investors on the recent trends in the Pakistani economy, the government''s reform agenda and key priorities.

The success of the transaction after a 7-year absence from the global capital markets highlights investor confidence in the recent changes in the country''s leading economic indicators, external finances and structural reforms undertaken by the 10-month old government under the leadership of Prime Minister Nawaz Sharif. Pakistan decided to capitalise on its improving macroeconomic fundamentals and re-establish itself in the international debt capital market after an absence of over 7 years, the spokesman said. Pakistan had last accessed the bond market in 2007.

$2 billion 5-, 10-year Eurobonds sold | Business Recorder

 

[VCheng]

Pakistan Issues $2b in Global Bond Markets

 

[Nishan_101]

Pakistan on Wednesday sold $2 billion worth of five- and 10-year bonds in its first international sale since 2007, the Finance Ministry officials said. The cash-strapped South Asian nation marketed $1 billion of five-year notes at a yield of 7.25 percent and $1 billion of 10-year securities at 8.25 percent, said an official requesting not to be named as the figures would not be officially released until Thursday.

The market rallied after the sale, strengthening the PKR. The sale will also boost reserves and help Pakistan meet International Monetary Fund (IMF) conditions. Last September, the IMF saved Pakistan from possible default by agreeing to lend it $6.7 billion over three years.

The IMF gives each subsequent disbursement after confirming a country is on track with the conditions of the bailout. Pakistan must crack down on rampant tax evasion and broaden the tax base by eliminating tax exemptions and loopholes. Pakistan has received three tranches that total about $1.6 billion from the lender. It has already had to get several waivers for failing to meet the conditions of the loan.

Meanwhile, a spokesman of the Ministry of Finance in a press release issued here on Wednesday said after a period of seven years, Pakistan made a historic return to the international bond market with a $ denominated dual tranche offering aggregating $2.0 billion, raising $1.0 billion each in 5- and 10-year tenors, respectively. The transaction represents the largest-ever international bond offering by Pakistan.

The spokesman said against the initial expectations of raising $500 million, the investor response was overwhelmingly strong and the order-books were oversubscribed across the two tranches, consisting of over 400 orders from high quality investors. The five-year bonds were distributed across all major geographic regions: 59 percent in the US, 19 percent in UK, 10 percent Europe, 10 percent in Asia and 2 percent others. Fund managers took 84 percent of the five-year issue, banks 8 percent, hedge funds 7 percent and insurance company/pension funds 1 percent.

The 10-year bonds were distributed 61 percent in the US, 21 percent in UK, 12 percent in Europe, 5 percent in Asia and Middle East and 1 percent others. Fund managers took 86 percent of the 10-year issue, hedge funds 9 percent, banks 4 percent and insurance company/pension funds 1 percent.

The government of Pakistan conducted extensive global roadshows with two teams covering key financial centers. A team headed by the Finance Minister visited Dubai, London and New York and another team headed by the Finance Secretary, Ministry of Finance visited Singapore, Hong Kong, Los Angeles, San Francisco and Boston. The Pakistan government delegations met directly with a cross-section of several institutional fixed income investors during the four days of roadshows. The teams updated the investors on the recent trends in the Pakistani economy, the government''s reform agenda and key priorities.

The success of the transaction after a 7-year absence from the global capital markets highlights investor confidence in the recent changes in the country''s leading economic indicators, external finances and structural reforms undertaken by the 10-month old government under the leadership of Prime Minister Nawaz Sharif. Pakistan decided to capitalise on its improving macroeconomic fundamentals and re-establish itself in the international debt capital market after an absence of over 7 years, the spokesman said. Pakistan had last accessed the bond market in 2007.

$2 billion 5-, 10-year Eurobonds sold | Business Recorder

Why not sell all of the local Govt.Financial Institutions which might worth more than $10 Billions and invest in Gwadar and other parts of Pakistan including building dams in Sindh and Balochistan.