Five Chinese firms have submitted bids to assist Pakistan in raising funds through Panda bonds as the country prepares to re-enter global capital markets, Bloomberg reported on Wednesday. By the proposal deadline, the government had received three offers from law firms and two from credit rating agencies. Additionally, two Pakistani firms expressed interest in serving as domestic legal counsels for the bond issuance.
The Ministry of Finance is currently evaluating these proposals before making a final decision. This move comes on the heels of recent economic developments, including Fitch’s upgrade of Pakistan’s credit rating from CCC to CCC+ and S&P’s reaffirmation of the country’s long-term foreign currency debt rating at CCC+. While these are small improvements, they remain within the junk classification range.
Last month, Pakistan secured a new $7 billion loan agreement with the IMF, which is now pending board approval for the disbursal of funds. Earlier this year, the government announced plans to raise up to $300 million through bonds targeted at Chinese investors. Finance Minister Muhammad Aurangzeb stated that this initiative aims to diversify funding sources and tap into new markets.
To improve its financial standing, Pakistan has implemented measures such as raising taxes and energy prices to increase revenue. The government also plans to sell shares in state-owned enterprises, including Pakistan International Airlines and power distribution companies (DISCOs). Furthermore, the current coalition government is considering future fundraising drives in Europe and the United States as part of its broader strategy to strengthen the country’s financial position.