ISLAMABAD(National Times)- Pakistan has raised a record $3 billion \u2014 its single largest international capital market transaction \u2014 through a dual-tranche Eurobond sale that drew nearly $6bn in orders, the Ministry of Finance said on Thursday.<\/p>\n\n\n\n
In a statement, it said: \u201cThe transaction attracted nearly $6bn in orders \u2014 almost twice the amount issued \u2014 from a broad and diversified base of institutional investors across global markets and continents.\u201d<\/p>\n\n\n\n
\u201cThe successful transaction marks a major milestone in Pakistan\u2019s renewed and increasingly diversified access to international capital markets, demonstrating strong investor confidence and Pakistan\u2019s ability to access global funding markets at significant scale,\u201d the ministry added.<\/p>\n\n\n\n
The transaction includes $1.75bn through a 5.5-year bond at a coupon rate of 7.5 per cent and $1.25bn through a 10-year bond at 7.9pc, the ministry said.<\/p>\n\n\n\n
Pakistan\u2019s last most expensive Eurobond was raised more than a decade ago at an 8.25pc interest rate during the tenure of the PML-N government. It reached maturity a couple of years ago and has already been repaid.<\/p>\n\n\n\n
The finance ministry said on Thursday that the total global demand for Pakistani paper amounted to $6bn.<\/p>\n\n\n\n
\u201cThe competitive pricing across both maturities, together with strong demand extending to the 10-year tenor, demonstrates Pakistan\u2019s ability to mobilise sizeable longer-term financing as international investors reassess the country\u2019s improving macroeconomic and credit fundamentals,\u201d it said. However, the significance of this transaction goes well beyond the amount raised, it added.<\/p>\n\n\n\n
\u201cThe transaction also represents an important milestone in Pakistan\u2019s broader road to market strategy,\u201d the ministry said.<\/p>\n\n\n\n
It said that after the successful inaugural Panda Bond and improvements in Pakistan\u2019s sovereign credit profile, this was the first issuance under the country\u2019s renewed strategic Global Medium-Term Note (GMTN) Programme \u2014 creating a platform for diversified access to international capital markets.<\/p>\n\n\n\n
\u201cThe objective is not simply to raise additional debt. Pakistan is pursuing a broader strategy of active sovereign liability management \u2014 diversifying financing sources, extending maturities, reducing refinancing and rollover risks, and creating opportunities to replace shorter-term and more expensive obligations with longer-duration, competitively priced financing, where economically beneficial,\u201d the ministry said.<\/p>\n\n\n\n
\u201cPakistan has already pursued substantial early retirement of domestic debt ahead of maturity. Extending that discipline to external financing is part of the same objective: Borrow better. Extend maturities. Diversify funding. Reduce refinancing risk. Improve the sovereign debt profile. This is the difference between simply borrowing and actively managing the sovereign balance sheet,\u201d it added.<\/p>\n\n\n\n
It said that over the past three years, Pakistan\u2019s improving economic trajectory had increasingly been recognised through successive sovereign credit-rating upgrades and renewed access to international capital markets.<\/p>\n\n\n\n
\u201cNow, global investors have reinforced that assessment with billions of dollars of actual capital,\u201d it said.<\/p>\n\n\n\n
\u201cThe depth of the order book, its geographically diversified institutional investor base, and substantial demand for a 10-year Pakistan sovereign instrument together provide a powerful market-based signal of renewed confidence in Pakistan\u2019s medium and long-term trajectory,\u201d the ministry said.<\/p>\n\n\n\n
\u201cThree years of rebuilding credibility; nearly $6bn of global investor demand, and a record $3bn issued in a single transaction \u2014 it is a landmark moment in Pakistan\u2019s journey from economic stabilisation towards sustainable growth \u2014 and a stronger platform for the road ahead,\u201d it concluded.<\/p>\n\n\n\n
In April, the government initially raised $500 million through a three-year Eurobond under its GMTN Programme at a coupon of 6.975pc. The issue was subsequently increased to $750m through a $250m green-shoe option after stronger-than-expected investor demand. The bond matures in April 2029.<\/p>\n\n\n\n
Pakistan has also repaid a $1.4 billion Eurobond that matured in April, allowing the government to re-establish a pricing benchmark in international debt markets after several years of relying heavily on multilateral, bilateral and commercial financing.<\/p>\n\n\n\n
The latest offering extends the maturity profile beyond the three-year tenor used in April, with the proposed five and 10-year tranches providing a test of investors\u2019 willingness to hold Pakistani sovereign debt for longer periods.<\/p>\n","protected":false},"excerpt":{"rendered":"
ISLAMABAD(National Times)- Pakistan has raised a record $3 billion \u2014 its single largest international capital market transaction \u2014 through a dual-tranche Eurobond sale that drew nearly $6bn in orders, the Ministry of Finance said on Thursday. In a statement, it said: \u201cThe transaction attracted nearly $6bn in orders \u2014 almost twice the amount issued \u2014 […]<\/p>\n","protected":false},"author":2,"featured_media":132426,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-132425","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest_news","entry"],"yoast_head":"\n