- Govt plans to launch various international obligations in the coming years.
- The success of planned bond emissions depends on the appetite of the market in force.
- High interest rates could pose challenges to Pakistan borrowing plans.
Islamabad: Pakistan’s upcoming budget for the 2025-26 financial year should see a leap in reimbursement of the external debt, because it will be necessary to identify two large Eurobond obligations, totaling $ 1.5 billion, at maturity this year.
Faced with these assembly debt service requirements, Islamabad actively explores options to reintegrate the international capital market.
The government plans to launch various international obligations during the next financial year, including Eurobonds, Sukuk and potentially Panda obligations.
However, the success of these programs of obligations planned will strongly depend on the appetite of the market in force and the increase rates in the United States and in other global financial centers.
Disappointed market conditions or high interest rates could pose challenges to Pakistan borrowing plans.
After the success of the first review of its current loan programs with the International Monetary Fund (IMF) and the subsequent publication of the second branch of funds, Pakistan provides for an additional improvement in its credit rating of international rating agencies.
The government has made efforts to launch a panda obligation during the outgoing financial year, but failed to deliver. There are increased requirements to enter the Chinese market, so the Panda obligation should be launched in the next financial year with a first broadcast of 200 to 250 million dollars.
“There are two major reimbursements which will become due to the maturity of Euro-components, one will be due in September 2025, worth $ 500 million, which was launched for 10 years, supported in 2015 at the rate of 8.25%”, confirmed the main official sources to The news Wednesday.
“The second reimbursement will be due to the maturity of the Eurobond worth $ 1 billion, which was launched in April 2021 at the rate of 6% for five years.”
Total debts and external liabilities are still being developed, although budget manufacturers are committed to showing figures on total dollar entries and outings due to loans and foreign subsidies.
During this current week, the Division of Economic Affairs and the High-Ups of the Ministry of Finance continued consultations to lead to total dollar entries in the form of loans and project outings as an external debt service, but one thing was clear that the maintenance of the external debt could be in order to keep two strong reimbursements due to the maturity of the Eurobonds.
Another reimbursement of the debt for an international obligation which was launched in April 2021 worth $ 1 billion would be mature in 2031, because this international obligation was issued at the rate of 7.3%.
The government had launched another international obligation in January 2022 to generate $ 1 billion for seven years and it would be matured in 2029.