(Web Desk) – The Asian Development Bank (ADB) has raised 1.83 billion Pakistan rupees ($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 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.
“Engineering local currency solutions is both an art and a science,” said ADB Treasurer Pierre Van Peteghem. “Not only must we marry investor demand with market conditions to achieve optimal currency and interest rates, but we must also dedicate time and resources to a close dialogue with the government to achieve the best possible outcome.”