Pakistan has kicked off a dollar bond offering that will be a key test ofinvestor sentiment after the resumption of a $6 billion bailout programwith the International Monetary Fund (IMF), Bloomberg reported.
According to the news report, Pakistan will be marketing the notes in threeparts, with the initial price guidance on the longest 30-year tenor in the8.875 percent to 9 percent range.
The decision to issue these bonds has come at a time of flurry in theeconomic and political landscape of Pakistan. While on one hand, Pakistan’seconomy, as well as the stock exchange, is struggling with the spike incoronavirus cases once again, on the other hand, the country’s financeminister has been sent packing with the Minister for industries as hisreplacement.
Hammad Azhar will replace Hafeez Shaikh as Pakistan’s third financeminister in less than three years.——————————
Last week, the IMF announced its decision to release about $500 million toPakistan after the completion of certain reviews of a $6 billion bailoutprogram. Around the same time, the ministry of finance had also announcedthe government’s plans to issue international Sukuk after the Eurobondissuance.
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Pakistan is expecting to raise north of $1.5 billion in global bondsif market conditions remained conducive, Muhammad Umar Zahid, director ofdebt at the ministry, said last month.
The FBR has exempted income tax on the profit on debt of an agency of aforeign government, a foreign national company, firm or association ofpersons or any other non-resident person, on Eurobonds and internationalSukuk issued under the government’s medium-term note program.
Under FBR’s notification, in the exercise of the powers conferred by clause(75) of Part I of the Second Schedulelink to the Income Tax Ordinance,2001, the federal government has approved exemption for the purposes of thesaid clause to the profit on debt income of an agency of a foreigngovernment, a foreign national company, firm or association of persons orany other non-resident person, on Eurobonds issued under the government’smedium-term note program.
