Pakistan to award mandate for sovereign bond

28 Mar, 2007

Pakistan will issue a sovereign offshore bond this fiscal year ending on June 30 and a mandate to manage the transaction will be awarded this week, a senior government official said on Tuesday.
"We have already shortlisted six investment banks and a final decision on the mandate will be made this week," said Ashfaque Hasan Khan, director general of the Finance Ministry's debt office.
Khan declined to give any names but said the six were shortlisted out of 13 banks that had made presentations for managing the transaction over the past couple of months.
The planned issue will be Pakistan's fourth foray into the international debt market since 2004, when it returned to the arena for the first time since economic sanctions were imposed for conducting nuclear tests in 1998.
Last year Pakistan sold $800 million in a dual-tranche sovereign bond, comprising $500 million in a 10-year issue and $300 million in 30-year paper.
Khan did not give any detail about the type and size of the transaction, saying it would be decided after consultation with the lead managers.
But banking sources said the government was likely to opt for 144A-type paper-a clause that makes the securities eligible for purchase and trade by institutional US investors-while the size was likely to be between $800 million and $1 billion.
They said the government was expected to select at least two investment banks to manage the transaction.
In 2004 Pakistan issued a $500 million, five-year eurobond, while in 2005 it floated a $600 million Islamic bond, also for a five-year term.

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