Pakistan to pitch OGDCL exchangeable bonds in July


Pakistan will be again pitching the intended $500 million exchangeable bonds of its blue chip entity, Oil and Gas Development Company Limited (OGDCL) to the foreign investors in July, an official source said.
He said the deal was on the cards, even though the deadline of June 30 was missed due to uncertainty in the international market because of the Greek debt crisis.
“If the situation improves, the bonds will be offered again to investors in July”. Pakistan had planned to generate $500 million from OGDCL exchangeable bonds before the end of the last fiscal year on June 30. The government had planned to offer the bonds to cover up its huge fiscal deficit of over six percent of GDP.
For seeking investment in the bonds non deal road shows were held in Abu Dhabi, London, Singapore and Hong Kong. The source said investor response was positive but due to uncertainty in international markets, the coupon rate was likely to go up. “We were advised to delay the deal for a few weeks”.
The government had appointed a financial advisory consortium consisting of Citibank, Credit Suisse, JP Morgan and BMA Capital, for the issuance of OGDCL’s exchangeable bonds of at least $500 million. The consortium is tasked to monetise up to 10 percent of government shareholding or up to 430,000,000 shares through an exchangeable bond transaction.
The government had estimated a coupon rate of five to six percent for the bonds but due to the crisis, investors were looking for higher yields of eight to nine percent. “We were not under any pressure to offer higher coupon rates”, he added.