Pakistan sold new bonds worth $2.5bn on Tuesday. Details of the tranches are as follows:

  • $1bn 5Y bonds at a yield of 6%, 25bp inside initial guidance of 6.25% area
  • $1bn 10Y bonds at a yield of 7.375%, 12.5bp inside initial guidance of 7.5% area
  • $500mn 30Y bonds at a yield of 8.875%, at the lower end of initial guidance of 8.875-9%

The issuance comes after the IMF announced resumption of Pakistan’s $6bn bailout program, of which $500mn was set to be released soon as per an announcement last week. Nicholas Yap, credit analyst at Nomura said, “The bonds should see decent investor demand following a number of positive developments in the country of late (including the IMF loan resumption).” The bonds are expected to be rated B3/B- in line with the issuer rating of B3/B-/B-. The new 5Y bonds offer a new issue premium of ~24bp based on average yield of its older 8.25% bonds due 2025 and 6.875% bonds due 2027 that are currently yielding 5.49% and 6.04% respectively. This is the first issuance by the sovereign since its $2.5bn bond issuance in 2017. As per Bloomberg, Pakistan’s rupee has been the best performing currency in Asia YTD, up 4% thus far.

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