The federal government Wednesday raised some Rs 116 billion through the sale of long-term investment bonds. The State Bank of Pakistan (SBP) conducted the auctions for Pakistan Investment Bond Floating Rate (PFL) and Pakistan Investment Bond Fixed Rate.
Auction for the sale of 10-year PFL was held with settlement date on August 9, 2018. The coupon rate on the floating rate PIBs will be equal to the benchmark rate plus/minus a margin decided in the auction. The benchmark rate would be the weighted average yield of the 6-month Market Treasury Bills (MTBs).
Overall, bids amounting to Rs 151.525 billion were received with a range of margin of 40 to 100 basis points over the benchmark. Out of the received bids, the federal government accepted bids worth Rs 101.525 billion at 70 basis points above the benchmark. Similarly, the auction for 3-, 5-, 10- and 20-year Pakistan Investment Bonds was also held with settlement date on August 9, 2018.
Overall, bids worth Rs 45.189 billion were arrived for the sale of 3-, 5- and 10-year PIBs. However, no bid was submitted for 20-year bonds. Three-year PIBs fetched bids amounting to Rs 15.288 billion, 5-year Rs 15.357 billion and some Rs 15.544 billion bids were received for 10-year long-term investment bonds. Out of received bids, the federal government borrowed an amount of Rs 14.361 billion through the sale of 5-year PIBs (fixed rate) at 9.25 percent cut-off yield. The remaining bids were rejected.