Pakistan raises $2.5bn Eurobonds against $5.3bn of bids

March 31, 2021 (MLN): Pakistan raised Eurobonds worth $2.5 billion on Tuesday in an auction that attracted bids of $5.3bn, suggesting there is interest among international investors for the country’s sovereign instruments given the high-interest rates at the offer. 

The country sold $1bn of the five-year instrument at a yield of 6%, another $1bn of the 10-year bond at 7.37% and $500 million of the 30-year at 8.87%. 

Speaking on Pakistan’s US dollar-denominated Eurobonds, Mattias Martinsson, Founder and Chief Investment Officer at Tundra Fonder, said on his official Twitter handle, ‘Pakistan's return to EB-market is likely to have been to establish benchmarks for more active participation going forward. As such the cost makes sense (as it will fall if reforms continue). A 30y USD-yield at 8.87% I'm even personally tempted.’

Taking to his Twitter handle, Minister for Finance, Revenue, Industries & Production, Hammad Azhar said, ‘Pakistan has very successfully concluded its first-ever 3-tranche capital market transaction yesterday. With 5, 10- and 30-year Eurobonds at 6%, 7.375% and 8.875%, leading global investors showed great confidence in our country's economy and future outlook.

This is the first instance of the current government turning to the international markets for raising capital. The new dollar inflows are expected to further help boost the rupee’s parity with the greenback, a trend witnessed throughout March. 

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