The government of Pakistan has decided that Floating Rate Pakistan Investment Bonds (PIBs) may also be auctioned as re-opening of previously issued Floating Rate PIBs. According to a circular issued by State Bank of Pakistan (SBP) on Tuesday, as per the re-opening auction mechanism of Floating Rate PIBs, re-opening auctions of Floating Rate PIBs will be conducted through uniform price competitive bidding auction process.
Primary Dealers will submit competitive bids in terms of price and the cut-off price, at which the GoP decides to accept bids, and the re-opening auction will apply uniformly to all accepted bids. Coupon rate on Floating Rate PIBs offered in re-opening auctions will be the same as determined in the first auction of respective issue of the bond and reset at the start of each coupon period, in accordance with instructions issued previously.
The successful bidders will make the settlement on settlement date at the amount calculated as per accepted price plus accrued interest for the number of days lapsed since the start of the coupon period based on respective coupon rate. All other auction rules and procedures will remain the same, the central bank maintained.