Pakistan has decided to accept offering of $750 million received for Eurobond at 6.875 percent interest. It is 40 basis points less than the bond floatation last year. We intend to raise $500 million through Eurobond issue, but it was oversubscribed by $3.538 billion which is 7 times more than the initial offer.
We have decided to accept offering of $750 million and the remaining will be returned to the investors, said Prime Minister Shaukat Aziz at a press conference. The bond was issued two days back and two teams comprising Advisor on Finance Dr Salman Shah, State Bank Governor Dr Shamshad Akhtar; and Advisor to Finance Ministry Dr Ashfaque Hasan Khan and Finance Secretary-General Nawid Ahsan conducted the road shows.
"I am very happy that the issue was oversubscribed as the investors expressed their confidence in Pakistan's policies, its economy and leadership," said Shaukat Aziz. The prime minister said: "The subscription is more than our expectations and this shows Pakistan's credit worthiness in the international capital market."
"The interest of investors was much better than the previous issues, the maturity period would be comparatively longer ie 10 years and the interest rate, too, would be less than previous issues," he added. He said in all about 200 investors subscribed to the issue. All the three regions - Asia, European Union, and United States - have almost equal representation in the subscription.
The prime minister expressed satisfaction over the development, saying the foreign direct investment (FDI) has already crossed $6 billion mark in the first eight months of the year. To a question, Shaukat Aziz said the funds generated through Eurobonds would be utilised for development. Replying to a question, he said the new budget would be pro-development and relief-oriented.
Shaukat Aziz said the budgetary proposals would contain measures to accelerate the pace of development for creating more job opportunities and fulfilling the needs of the common man.
Responding to a question, the prime minister said that the ban on wheat export has been imposed because of vast disparity in the price of the commodity in the domestic and international markets. He said the price of wheat is increasing in the international market and in the absence of ban the local market would have faced shortage of the commodity.
Answering another question, Shaukat Aziz said that PSO's privatisation was scheduled in June, but the Privatisation Commission could provide exact information on this issue.
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