By Staff Reporter
ISLAMABAD: The government moved to institutionalise its access to international capital markets on Tuesday, soliciting proposals from global banks to act as underwriters and lead managers for all its foreign-currency debt issuance over the next three years.
The request for proposals, issued a day after the country priced and upsized a $750 million three-year Eurobond, seeks three distinct banking consortiums to renew and manage the government’s Global Medium-Term Note program and its Sukuk Trust Certificate Issuance program. Once selected, the groups will stand ready to execute conventional Eurobonds — including green, sustainable, ESG, gender and sustainability-linked formats — as well as international Islamic Sukuk and rupee-denominated bonds settled in dollars.
Selection will hinge on the lowest yield, lowest coupon and lowest all-in cost, according to government officials. The structure is intended to give the Ministry of Finance a pre-committed pool of banks that can be called upon quickly whenever market windows open and external financing needs arise, rather than assembling ad-hoc syndicates for each deal.
The $750 million Eurobond closed Monday at a coupon of 6.975% and matures in April 2029. It was increased in size from an initial launch arranged by a Standard Chartered Bank-led group and will help refinance a portion of repayments owed to the United Arab Emirates on similarly priced facilities.
Khurram Schehzad, an adviser to the finance minister, described the fresh Eurobond as the first step in a deliberate three-year capital-markets roadmap. The new RFPs “highlight a structured external funding capital markets plan by the Ministry of Finance for the next three years.” “This plan only selects underwriters and advisers across three different funding structures,” Schehzad said. “Within this plan, the Ministry of Finance will decide as and when we will tap the market, based on the external funding requirements, over the next three years.”
Any future issuance will be timed according to market conditions and the advice of the appointed banks, subject to the government’s overall funding calendar. Deal sizes will be set at the point of execution. The three consortiums will be required to handle every aspect of transaction execution — structuring, pricing, underwriting, syndicate formation, investor roadshows, book-building, allocation and distribution — to ensure deep international demand and tight pricing.
Consortium 1 is reserved for up to five conventional international banks that will serve as joint lead managers, underwriters and book-runners exclusively for Eurobond issuance. Consortium 2 will comprise up to five banks, including at least one global Islamic financial institution, to cover international Sukuk on identical terms. Consortium 3 is limited to as many as three banks that will focus on rupee-denominated bonds settled in U.S. dollars under the GMTN program.
Banks must submit separate technical and financial bids for each of the three product lines. The deadline for submissions — and the opening of bids — is May 25. The move marks a shift toward a more systematic approach to Pakistan’s external debt management, replacing one-off mandates with longer-term banking relationships designed to lower overall borrowing costs and improve execution certainty in volatile markets.
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