Govt plans to launch Eurobond to generate up to $1 bn

The government has planned to launch Eurobond in the international capital market probably within the next few days in order to generate $750 million to $1 billion. 

Since the time, the present PTI government has come into power, it never enjoyed the political and economic peace in the country. This is perhaps the first government in the history of Pakistan that could never make friendly relations with opposition on any of the issues, the country is facing. When in opposition, PTI had opposed the issuance of international bonds, especially asset-backed Islamic Sukuk bonds. But PTI government itself faced hard opposition in the cabinet for placing the F-9 park as an asset guarantee for launching the Sukuk bond.  

Now the government is planning to launch Eurobond in the international capital market in order to generate $1 billion. This will be the first capital market transaction by the present government to meet the external debt obligations like repayment of major loans, including $3 billion to Saudi Arabia. The big economic powers had suspended debt payments of Pakistan and some other developing countries to help fight against the Covid-19. G20, the group of developed countries has extended debt suspension for the developing countries, including Pakistan up to June 2021.   

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The Ministry of Finance communicated to Governor State bank of Pakistan, Chairman CPEC Authority, federal Board of Revenue, Ministry of Foreign Affairs, Power Division, Petroleum Division, Privatization Commission, Board of Investment, Ministry of Planning, and Attorney General of Pakistan that it desires to issue Eurobond in the International capital market during this week for which global announcement will be done soon.  

The exact size of Eurobond has not been fixed so far as it will be determined keeping in view the need of the international market. It seems that Pakistan can opt to launch the Eurobond, worth $1 billion. The hired financial advisors had a session of brainstorming to finalize to put Pakistan’s economic case before international investors.  

The collection of a reasonable amount of foreign exchange reserves is the prime target of the government under the stalled IMF programme, therefore, it will have to depend upon rollover of loans and raising of multibillion dollars through the issuance of international bonds in near future.         

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