KARACHI: Pakistan has issued a new 10-year bond of $500 million in the international Euro bond market, the finance ministry said Friday, at a coupon rate of 8.25 per cent.
A finance ministry team comprising Finance Secretary Waqar Masood Khan and Governor State Bank of Pakistan Ashraf Wathra held road shows to launch the bond in London, Los Angeles, Boston and New York. The pricing of the bond was held on September 24, the ministry said.
The finance ministry said the issue was twice over subscribed.
“The economic downturn in China and uncertainty created by Fed decision has punctuated the weak market conditions forcing cancellation of planned issues by several issuers having strong credit ratings,” the ministry said in a statement.
“Under the circumstances, the finance minister with the approval of the prime minister, decided that it would be prudent to restrict the issue to the intended and announced level of $500 million in order to cover the forthcoming maturity in March 2016 of a bond issued in 2006,” the ministry said.
Pakistan’s inflation has fallen to its lowest in 12 years and foreign reserves have risen, largely thanks to low international oil prices, but foreign investment remains low.
Little progress has been made in improving tax collection or reforming the energy sector since Prime Minister Nawaz Sharif came to power in 2013, and the country remains vulnerable to price shocks once the global oil market recovers.