ISLAMABAD:- Financial News: Pakistan expects raising up to $1 billion from
global capital market on Wednesday (today) through Eurobond launch in New York
in front of executive board meeting of the International Monetary Fund (IMF).
With this, Finance Minister Ishaq Dar is relied upon to come
back with at any rate $1.5bn later this month to deliver on his guarantee to
raise the country’s foreign exchange reserves to the most elevated ever $21bn.
The forex reserves were recorded at $18.726bn on September
11, 2015, including $13.69bn held by the State Bank of Pakistan and $5bn by the
commercial/business banks.
Dar left on Tuesday for New York to lead decision of a
progression of roadshows taking place over the last few days in London and a
couple of major cities in the United States for the launch of Eurobond.
The shows started on September 18 from London as Secretary
Finance Dr Waqar Masood and Governor SBP Ashraf Mahmood Wathra held marketing
sessions with leading investors, delegates of leading banks, multinational
companies/organizations and other financial institutions.
Second round of roadshows was held in Los Angeles and Boston
currently week. The concluding session on September 24 in New York would focus
the pricing of the bond and based on market reaction and pricing, the government
would decided the final size of the transaction.
On September 28, the IMF executive board is scheduled to
take up Pakistan’s request for two waivers on non-compliance of committed
targets to clear way for disbursement of $502 million tranche.
If approved, this will take total disbursement under the
$6.6bn bailout package of 36 months to $4.55bn.
The government has evaluated around Rs101bn as foreign
inflows under Eurobonds during the current financial year ending June 2016.
Budget plans suggest the government had targeted Rs49.5bn of Eurobonds in the
last financial year but the transaction was delayed.
The government has been saying it planned raising $500m
through Eurobonds as targeted for the current financial year but it would additionally
like to make up for the delayed bond of last financial year, taking the total
size of the bond to $1bn depending on pricing.
In April 2014, the government had raised $2bn through
Eurobond, marking Pakistan’s reentry into the global capital market after 7
years. That transaction included two bonds of $1bn each with particular
maturity and mark up.
These included $1bn bond of five-year maturity and 7.5 %
interest rate and $1bn of 10-year maturity and 8.5pc return. Informed sources
said the finance-minister was expecting improved market reaction and lower
pricing on its second Eurobond launch in perspective of better economic
indicators and improved credit rating/score.
Published on Dawn, September 23rd , 2015