Pakistan to raise $1 billion through Islamic bonds

  • Pakistan to raise $1 billion through Islamic bonds

Pakistan to raise $1 billion through Islamic bonds

Oct 5 Pakistan will issue a dollar-denominated sukuk for $1 billion in the coming hours, the finance ministry said on Wednesday, in a deal which sees the country return to the global sukuk market after a two-year absence.

"We set an indicative price of 5.75 percent for the selling of the Sukuk bonds, we faced several questions about the stiff condition at the LoC, but the response was overwhelming which showed that confidence of the foreign investors over the Pakistan economy", Dar explained.

Ishaq Dar it was important to note that the "Subscription Agreement" with Joint Lead Managers provided that the certificates or interests therein will not be offered, sold or transferred directly or indirectly in Pakistan, to residents of Pakistan, or to, or for the account or benefit of, such persons. 38% of the orders were placed by investors from Europe, 27% from North America, 27% from Middle East and North Africa, 6% from Asia and 2% from other regions.

Pakistan is to start investor roadshows for a potential sale of the USA dollar-denominated Islamic bonds, aiming to begin the pricing and book-building process next week, the Ministry of Finance has said.

Pakistan's team comprising Finance Secretary and Governor State Bank of Pakistan is in Washington DC for a promotion campaign of road shows for Pakistan's International Sukuk 2016.

He said encouraging thing for Pakistan has been the recent acknowledgement from the Asian Development Bank, World Bank and International Monetary Fund and above all Harvard University, opining that the economy of Pakistan is set to grow by on average above 5 percent per annum in coming years.

The bonds will mature in 2021 with 5.5 percent rate of return.

Investor meetings will start on Thursday in the United Arab Emirates before moving to London on Friday and concluding in Boston and NY on October 3 and 4.

The International Sukuk market has been projected to remain subdued due to slowdown in Gulf economies.

Citi, Standard Chartered, Dubai Islamic Bank and Noor Bank of the United Arab Emirates had been appointed to arrange the sukuk issue, banking sources said. Find us on Facebook too!