July 10, 2019 (MLN): The State Bank of Pakistan has released the Auction Targets for Pakistan Investment Bonds (PIB)’s and Market Treasury Bills (MTB)’s for July 2019 – September 2019, via official notices today.
As per these notifications, the cumulative auction target for PIB’s at fixed rate for 3, 5, 10 and 20 years is Rs.300 billion, distributed based on fixed coupon rates of 7.25% for 3 year bond, 8% for 5 year bond, 8.75% for 10 year bond and 10.75% for the 20 year bond.
The total maturing amount for the period is Rs.415.635 billion which translates into a net retirement of Rs.115.635 billion by the government.
While the July Auction of PIB’s will be a reopening of the July 12, 2018 Issue, the SBP hinted at subsequent auctions being a fresh issue, which may or may not result in a revision of Coupon Rates.
Likewise, the auction target for the 10 year floating rate PIB's is Rs.400 billion.
The SBP in its June auction schedule announcement had informed about the issue of 3 and 5 year floating bonds in addition to 10 year, however, in the latest auction schedule the SBP has only given auction targets for the 10 year Floating Bond.
It was further mentioned that the coupon rate of PIB (floating) will be benchmark rate plus/minus a margin decided at the auction. “Benchmark rate would be latest 6 month MTB weighted average yield.”
Maturing amount for the Floating Rate bond is Rs.11.526 Billion showing an additional funding requirement of Rs.388.474 Billion
On the other hand, the total auction target for 3 months, 6 months and 12 months MTB is Rs.6,300 Billion composed of a total maturing amount worth Rs.5,065.456 Billion and additional funding worth Rs.1,234.544 Billion.
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