ISLAMABAD: Asian Development Bank (ADB) has raised Rs1.83 billion ($11.4 million) in a first issue of local currency “karakoram” bonds.
A karakoram bond is an offshore bond denominated in Pakistan rupees and settled in US dollars. Before the karakoram bond issuance, the multilateral development bank of which Pakistan is a member had no local currency loans in the country.
The bonds were arranged by Citigroup Global Markets and sold to European asset managers and the international bond issue pays a 7.50 percent semi-annual coupon and matures in August 2023.
“It is anticipated that ADB’s local currency loans will be a boost to private sector development in Pakistan,” ADB said in a statement.
“The Pakistan rupee-linked karakoram bond floated by ADB is an excellent initiative. I am confident it will have significant mutually beneficial outcomes for Pakistan and ADB," Abdul Hafeez Shaikh, the Pakistani prime minister's special adviser on finance, said as quoted in the ADB statement.
State Bank of Pakistan governor Reza Baqir congratulated the ADB team and affirmed his appreciation of the lender's support for Pakistan’s financial and economic development.
“ADB’s inaugural issue of Pakistan rupee-linked karakoram bonds will help deepen the capital markets of Pakistan while channeling funding to vital economic sectors,” he said.