IslamicFinance.de

A shortage of global sukuk will probably help cut borrowing costs on Pakistan’s first Islamic bonds since 2005, boosting a government besieged by opposition street protests. The government plans to offer $1 billion of the notes, with the sale scheduled for the first week of September. Assuming it’s a five-year maturity, the coupon rate will probably be 5.75 percent to 6.25 percent. The nation paid 7.25 percent for 2019 non-Islamic dollar debt in April. This deal will be an important test to see how a politically volatile country, as Pakistan is at the moment, can issue a high-yield sukuk. There will be demand because no other country is giving this huge return. The rupee has rebounded 9.3 percent from a record-low of 108.70 per dollar on Dec. 3. It closed at 99.49 yesterday.