Many Commercial banks have offered their bids for obtaining a contract to Issue Pakistan’s upcoming sovereign bonds through which government wants to generate a couple of billion dollars in order to repay bullet payment of $1 billion next month.
Ministry of Finance representatives said that the government has received a good amount of promising responses from the top European, American and Chinese banks as they have submitted technical and financial bids for the contract of financial advisers to float sovereign bonds. They further added that it received ten bids from potential financial advisers and two associations will be hired to set up structures for floating Eurobond and Sukuk bonds during the next year.
The bids would be technically assessed by this week and after that their financial bids will be opened. The other bidders may be requested to compare the price of the lowest bidder to form an association.
In the past, many financial advisers have been selected including Citibank and Deutsche Banks. The Credit Suisse AG Group has won a bid to deliver financial advisory services for one of the biggest privatization transactions of two-LNG fired power plants that are supposed to go for around $2 billion for impoverished Pakistan.
Different from the past when Pakistan had hired transaction-specific financial advisers, this time the govt is hiring the association of banks for one year focused at saving time being utilized in the completion of the process. The December end NIR objective is negative $16.3 billion.
Pakistan will also provide $399.5m in interest on all the outstanding amounts of Eurobond and Sukuks in this fiscal year. Moreover, the $2.3b worth of commercial loans would also flourish in this fiscal year. This involves $1.7 billion of China Development Bank, $300 million of Bank of China, $100 million of Standard Chartered Bank and $200 million of Credit Suisse.
As of October 4, the total official foreign currency reserves remained at only $7.7 billion, regardless of a $1 billion IMF loan and a $500 million loans by the Asian Development Bank.