Pakistan raises $2.5 billion through Sukuk, Eurobond

ISLAMABAD: Pakistan has raised $1 billion in a five-year Sukuk and $1.5 billion in ten-year Eurobond transactions. According to a Finance Ministry handout, the profit rate for the Sukuk is 5.625 per cent and for the Eurobond is 6.875 per cent, respectively. The order book for Pakistan?s sovereign papers was over $8 billion but Pakistan picked up only $2.5 billion in order to ensure low final yields on the Sukuks and Eurobonds. The 6.875 per cent rate for the 10-year Eurobond is the lowest ever rate, as no 10-year bond has ever been sold at a cheaper rate by Pakistan in the international capital markets. Pakistan has never executed multiple tranche transactions worth $2.5 billion simultaneously, the ministry stated further. About 44 per cent of the orders were placed by investors from Europe, 24 per cent from Asia, 20 per cent from North America, eight per cent from Middle East and 12 per cent from other regions. The process of issuance of Sukuk and Eurobond included roadshows in Dubai, London, Boston and New York by a team comprising Prime Minister's Special Assistant on Economic Affairs Miftah Ismail, Finance Secretary Shahid Mahmood and State Bank of Pakistan Governor Tariq Bajwa. The approval to issue Euro and Sukuk bonds was accorded by Prime Minister Shahid Khaqan Abbasi. The roadshows ended on November 28, 2017 and bookbuilding process closed on 29th November, 2017. The subscription agreement with the joint lead managers provides that the certificates or interests therein will not be offered, sold or transferred directly or indirectly in Pakistan, to residents of Pakistan, or for the account or benefit of such persons.