One Billion Dollars Raised Through Eurobonds Issued In March

Aizbah KhanWeb Editor

07th Jul, 2021. 10:25 am
Euro to PKR

Pakistan recently borrowed an additional $1 billion from the issuance of a three-phase Eurobond, which raised $2.5 billion in March 2021.

According to the report, the bonds were involved in purchases of more than $3 billion for 5, 10 and 30 years.

Pakistan had accepted $300 million at 5.875% for 5 years, $400 million at 7.12% for 10 years and  $300 million at 8.450% for 30 years.

Fahad Rauf, head of research at Ismail Iqbal Securities, said Pakistan has adopted a program-oriented approach with the entry of Global Medium Term Note (MTN) so that it can regulate the market on a regular basis.

MTN allows designated or designated dealers to raise funds from investors on a permanent or intermittent basis, under which one bond is registered only once.

However, the issuer can easily enter foreign markets to raise capital under MTN.

Pakistan had set a starting price of 6.125 per cent for a five-year instalment due in 2026, about 7.375 per cent for a 10-year bond maturing in 2031 and 8.875 per cent for a 30-year note due in 2051.

“Intervention is very important because global interest rates are low and there is a lot of liquidity in the market,” he said.

Fahad Rauf further said that Pakistan’s external financing needs are increasing where the target of net external financial assistance through commercial sources for FY22 is about $5.5 billion, of which the Eurobond / Sukuk issue is Rs 3.5 billion. The dollar is the target.

The IMF program is also stalled, which could be a challenge for future fundraising.

Fahad Rauf said that it is better now that the time has come to control the markets as the situation of Pakistan’s external account is also better now but the growing trade deficit in the future shows that some pressure can be seen.

Earlier in May this year, Pakistan has formally launched its first Green Euro (Indus Bond).

Green Euro (Indus Bond) has been issued by WAPDA on the London Stock Exchange in May 2021.

Green Euro (Indus Bond) has been issued for the financing of Diamer Bhasha and Mohmand Dam.

The Green Eurobond has been issued on the basis of WAPDA’s stable financial position rather than state guarantee.

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