HONG KONG: Pakistan has mandated four banks to arrange fixed income investor meetings starting today ahead of a potential issue of a US dollar-denominated Islamic bond, a document from lead managers said yesterday.
The sovereign, rated Caa1 by Moody’s and B- by Standard & Poor’s, has picked Citigroup, Deutsche Bank, Dubai Islamic Bank and Standard Chartered to arrange the roadshows and the possible deal, it showed.
Pakistan will hold roadshows in the UAE today, before heading to London and Singapore tomorrow, with a 144A-compliant, benchmark-sized sukuk to follow, subject to market conditions, the document added. Benchmark size is traditionally understood to mean upwards of $500m. If a debt issue is 144A-compliant, investors in the United States can buy the offering.
The sukuk uses a Shariah-compliant sale and lease-back structure to underpin the transaction. Proceeds will be used to purchase land comprising the M-2 Motorway, which connects Lahore to the capital Islamabad.
Political instability in Pakistan had temporarily caused some uncertainty around the sovereign sukuk issue as Prime Minister Nawaz Sharif came under pressure from weeks of demonstrations calling on him to resign.
Pakistan, a favourite with frontier market investors since peaceful elections were held there last year, sold $2bn of dollar-denominated bonds in April after attracting $7bn in investor orders.
Reuters
