5 Chinese Firms Bid to Help Pakistan Raise Funds Via Panda Bonds

Five Chinese firms submitted bids to Pakistan to raise funds through Panda bonds as the country moves forward with plans 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. 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. Fitch recently upgraded Pakistan’s credit rating from CCC to CCC+ while S&P reaffirmed the country’s long-term foreign currency debt rating at CCC+. These are small improvements but are still categorized as junk classifications. Last month, Pakistan secured a new $7 billion loan agreement with the IMF which is only pending a board approval for 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 said this move 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 plans to sell shares in state-owned enterprises, including Pakistan International Airlines and power distribution companies (DISCOs). The current coalition government is also considering future fundraising drives in Europe and the United States.