After a period of seven years Pakistan made a historic return to the international bond market with a US$ denominated dual tranche offering aggregating US$ 2.0 billion, raising US$ 1.0 billion each in 5 and 10 years tenors respectively. The transaction represents the largest ever international bond offering by Pakistan, disclosed the spokesman of the Ministry of Finance.
He said that against the initial expectations of raising US $500 million, the investor response was overwhelmingly strong and the order-books were oversubscribed across the two tranches, consisting of over 400 orders from high quality investors.
The five year bonds were distributed across all major geographic regions: 59% in the US, 19% in UK, 10% Europe, 10% in Asia and 2% others. Fund managers took 84% of the five year issue, banks 8%, hedge funds 7%, insurance company/ pension funds 1%.
The ten year bonds were distributed 61% in the US, 21% in UK, 12% in Europe, 5% in Asia and Middle East and 1% others. Fund managers took 86% of the ten year issue, hedge funds 9%, banks 4%, insurance company/ pension funds 1%.
The Government of Pakistan conducted extensive global road-shows with two teams covering key financial centers. A team headed by the Finance Minister visited Dubai, London and New York and another team headed by the Finance Secretary, Ministry of Finance visited Singapore, Hong Kong, Los Angeles, San Francisco and Boston. The Pakistan government delegations met directly with a cross-section of several institutional fixed income investors during the four days of road-shows. The teams updated the investors on the recent trends in the Pakistani economy, the government's reform agenda and key priorities.
The success of the transaction after a 7 year absence from the global capital markets highlights investors’ confidence in the recent changes in country’s leading economic indicators, external finances and structural reforms undertaken by the 10-month old government under the leadership of Prime Minister Nawaz Sharif.
Pakistan decided to capitalize on its improving macroeconomic fundamentals and re-establish itself in the international debt capital markets after an absence of over 7 years, the spokesman of the Ministry of Finance said. Pakistan had last accessed the bond market in 2007.
Regaining access to the international capital markets will constitute important factor in supporting the multilateral flows. The spokesman said that demonstrating the ability to raise financing from a diverse pool of investors is a positive sign for all stakeholders. Furthermore, setting a benchmark allows foreign direct investors to correctly assess the investment climate in Pakistan and creates market access for other potential issuers from Pakistan.
No comments:
Post a Comment