Islamabad: Asian Development Bank (ADB) sold Rs 1.6 billion worth of second Pakistani rupee denominated Karakoram Bond on 28 January.
According to ADB’s tweet, the Rs 1.6 billion ($10m) worth of Karakoram Bond has a maturity period of 5 years. Because of positive response on the first issuance, the lead managers of Standard Chartered Bank placed it with two European investors, with proceeds invested into Pakistan goverment securities.
It may be mentioned here ADB has raised Rs 1.83 billion ($11.4 million) in a first issue of local currency Karakoram Bonds by a multilateral development bank, of which Pakistan is a member.
A Karakoram Bond is an offshore bond denominated in Pakistan rupees and settled in US dollars, listed on a major stock exchange and settled through an international central securities depositary.
The international bond first issue pays a 7.50% semi-annual coupon and matures in August 2023. The bonds were arranged by Citigroup Global Markets and sold to European asset managers.
The net proceeds from the sale of the bond issue will be included in ADB’s ordinary capital resources. Previously, ADB had no local currency loans in Pakistan, but this option will be offered in future projects as an alternative to dollar borrowing. It is anticipated that ADB’s local currency loans will be a boost to private sector development in Pakistan.
