Pakistan considering USD 750 mln Eurobond issue

The Pakistan government has consulted some leading international financial institutions on plans to float its first Eurobond issue in order to improve economy and shore up dwindling foreign exchange reserves, sources said today.
Sources in the finance ministry said that the government wants to raise USD 750 million through the Eurobond issue.
"Advice and consultations are on with some leading banks like Citibank, HSBC and International China Banking Corporation," a source said.
Another source said the plan to issue eurobonds was also to shore up the Pakistani rupee which has depreciated to around 107 rupees a USD dollar.
Since January, the Pakistani rupee has lost over 6.2 per cent against the dollar.

An International Monetary Fund team is in Pakistan to check progress on reforms tied to a USD 6.7 billion loan package.

Another source said the government would only take a decision on issuing the bonds after getting feedback from the banks.
"Basically the ministry is waiting for advice on when to launch the bonds, what should be the selling price and volume to the offered," he said.
Pakistan had managed to raise USD 750 million and USD 500 million in its last bond issues in 2007, which were offered with a 7.75 per cent markup and a 10-year term.
Pakistan has got a USD 540 million first installment of the three-year loan deal with IMF in September, but Pakistan has been told to enforce strict economic reforms.

The central bank recently cautioned that Pakistan's foreign exchange reserves have fallen this year to just USD 4.2 billion - USD 300 million below the target set by the IMF for the end of September.