ISLAMABAD – Pakistan has given a contract of financial adviser for thePanda bonds to a consortium of four banks – two each from China andPakistan.
The consortium consists of Habib Bank Ltd and Citibank from Pakistan sideand China International Capital Corporation (CICC) and China DevelopmentBank (CDB). The consortium will assist the country in its first-ever Pandabond auction soon.
While there is no official word on the size of floatation, sources familiarwith the development said it could be anywhere near $1.3 billion, with aninitial tranche of $300 million.
Pakistan accepted proposals on March 20 and nine parties participated inthe bidding process – four were shortlisted.
The shortlisted banks included Bank of China, Consortium of Industrial andCommercial Bank (ICBC) of China, Guotai Junan Securities, and HaitongSecurities.
Finally, the consortium consisting of HBL, Citi, CICC, and CDB was awardedthe contract.
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The next phase includes roadshows and book building process – somethingcrucial for the success of the bonds because it will determine the depth ofthe participation and the yields that Pakistan’s government will have topay on the bonds.
The roadshows will target the regions where large pools of investors withRMB holdings are found, such as Beijing, Shanghai, Hong Kong, Singapore,Taiwan, and a few other cities.
There are two kinds of Panda bonds exchange-traded and those that are heldby banks on their balance sheets. But, Pakistan is more likely to go for anexchange-traded bond, given Pakistan’s credit rating.
