Pakistan will issue $800 million valued investment bonds by the end of this month against the subscription of $2 billion. The settlement of this bond would be under T+ 5 formula. Dr Salman Shah, Finance and Economic Advisor to Prime Minister, addressing a press conference at the State Bank premises here said on Sunday.
He was accompanied by Dr Ashfaq, Chief Economist, Ministry of Finance.
Dr Shah said that out of total subscription of Investment Bonds of $2 billion, acceptance of Pakistan is that of $500 million for 10 year and $300 million for 30-year period.
He said that marketing of the bonds had been done under US law 144A. He said: "We have tapped American market after 20 years." In issuance of bonds, he said, all efforts had been made to cover yield cure.
He said of total distribution of bonds for 10-year period was US 31percent; Europe 45 percent; and Asia 24 percent. For 30-year period bond, he said, this distribution remained US 32 percent; Europe 42 percent; and Asia 26 percent. He said that investors'' distribution of the 10-year bond remained as Asset Managers 49 percent; Banks 28 percent; Insurance 13 percent; and Retail 10 percent.
For 30-year bond, he said, this ratio was Asset Managers 50 percent; Banks 27 percent; Insurance 18 percent; and Retail 5 percent.
About maturity of the bonds he said that for 10-year bond it was March 30, 2016, and for 30-year bond it was March 31, 2036. The listing of these would be held in Luxembourg, he added.
About Coupon payment of 10-year bond he said it was 7.125 percent annually. This would be paid on bi-annual basis. Coupon payment of 30-year bond would be 7.875 percent annually, again to be paid on bi-annual basis, he added.
Dr Salman Shah said he was happy over the success of the bonds. He said that now Pakistan could go to international market as per its needs. He said that on good experience maturities of 15, 20, and 25 years would also be tapped in future strategies.
The Advisor said that with progress coming on economic horizon, benchmark spread of the country had been reduced.
He said that with the economic reforms undertaken by the government, confidence of international investors in the Pak economy had increased. He said that more than 150 international investors have posed confidence in the investment bond.
Talking about measures to improve further economic scenario, Dr Salman said: "We are embarking on a successful strategy to boost economical as well as political indicators." He added that with stability, the problem of financing for economic development would end. He said now people are willing to take long-term financial risk here.
Regarding strategy to reduce poverty he said that with growth at the current rate the level of poverty would be reduced to half in the next 15 years, or earlier.
Talking of foreign debt, he said it stood at $34 billion.
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