Govt invites bids from financiers as it eyes more borrowing

In a strategic move to bolster its financial standing and manage its external debt, the Pakistani government has initiated a process to engage international financial consortiums for its future borrowing endeavors. This comes shortly after successfully raising $750 million through a three-year Eurobond at a 6.975% interest rate. The government is now inviting bids from global players to act as underwriters, lead managers, and book runners for transactions in the capital markets over the next three years.

The selection criteria are stringent, prioritizing consortiums that offer the lowest yield, coupon, and overall cost. This competitive bidding process is designed to ensure that Pakistan secures the most favorable terms for its international borrowings. The objective is to establish a structured approach to external financing, allowing the government to tap into global markets efficiently and as required, based on its financing needs.

Dawn understands that these selected consortiums will be instrumental in managing a diverse range of capital market transactions. This includes renewing existing programs like the Global Medium-Term Note (GMTN) Programme and the Sukuk Trust Certificate Issuance (TCI) Programme. Furthermore, these arrangements will facilitate various specialized issuances such as ESG bonds, green bonds, gender bonds, sustainable bonds, and sustainability-linked bonds, alongside international Sukuk and local currency-denominated bonds settled in US dollars. The government's proactive approach signals a commitment to prudent financial management and a desire to leverage international capital markets effectively to meet its economic objectives.

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This plan only selects underwriters and advisers across three different funding structures. Within this plan, the Ministry of Finance will decide as and when we will tap the market, based on the external funding requirements, over the next three years.