Pakistan plans to issue bonds worth 2 billion dollars in the global market taking advantage of the lower rates and also it will support ailing foreign exchange reserves.
Pakistan Cabinet has approved floatation of Euro and Sukkuk Bonds. The finance ministry has started working speedily on the issuance of the bonds and soon the ministry would issue expression of interest, entitling foreign and local banks with consortium of some other financial institution to help sell the bonds.
The government plans to sell around one billion dollars each of Euro and Sukkuk bonds, but however, the officials expect as the bonds will be sold in the price tag of six to seven percent and the rates in the global financial market have been at lower mark, the global institutions would place bids in range of four to five billion dollars.
“With government in need of foreign exchange and shore up foreign exchange reserves there is likelihood that if bids place valuing four billion dollars for ten years tenure, the government might lift the amount comfortably”, he said.
The previous bonds floated by the government have been selling at premium and in higher demand which showed that foreign investors are betting on the country’s good economic performance.
In September last year, the government raised $1 billion by floating Sukuk bond at 5.5% interest rate.
In September 2015, the government had issued Eurobonds valuing $500 million with a 10-year maturity in the international market at an interest rate of 8.25%