KARACHI: Pakistan on Wednesday raised $2.5 billion from global capital markets after the government issued the five-year Sukuk (Islamic bond) and the 10-year Eurobond at relatively lower rates.
It was the first venture into foreign capital markets since the outbreak of major political turbulence in the country.
A five-year Sukuk Al-Ijarah and 10-year Eurobond fetched the highest-ever amount for Pakistan in a single such attempt abroad despite unstable political situation in the country.
Economists are of opinion that $2.5 billion injection would provide a breathing space to the government for its apathy to turn back to the International Monetary Fund (IMF) ahead of General Elections 2018.
Pakistan received bids worth $8 billion for the two bonds that the government floated in New York yesterday.
The government raised $1 billion through Sukuk at 5.625% and $1.5 billion via the Eurobond at 6.875 per cent.
Despite a lower yield rate in comparison to Pakistan’s last foray into international bond market, the participation was high.
Last year, the government raised $1 billion through a five-year Sukuk at 410 basis points above the five-year US Treasury bill, whereas that spread was 365 bps this time around. The yield on the 10-year bond was down by 1.6 per cent from the last 10-year bond floated by Pakistan in foreign capital markets.
