Quote:
Originally Posted by Durrani Abid
$1 billion through five-year bonds at a fixed rate of 7.25%, which is as many as 558 basis points above the benchmark five-year US Treasury rate. The rest of the $1 billion was generated through 10-year bonds at a fixed rate of 8.25%, which is 556 basis points above the corresponding 10-year US Treasury benchmark rate.
558 and 556 basis point difference means 5.58% and 5.56 % difference respectively.Is it not a huge difference in the yeild.
Though higher-than-benchmark rate is attributed to the ‘premium’ that Pakistan must pay on its sovereign bonds in order to generate investor interest, as investment in Pakistani bonds is riskier than that in the US treasury instruments.Nevertheless the difference is too high to justify.
Take the case of Greece, when it went bankrupt of 100 billion USD, it entered into Eurobonds and earned millions of USD just at the yield rate less than 5%.
So are we in worse condition than Greece ? No certainly not. Then why we have set such big yield?
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Sorry dear but you have confined me into a dilemma i mean i am not comprehending that i should laugh or weep dear friend you are comparing a European country with Pakistan do you know about their currency rate compare to US dollar , and this is Pakistan where terrorism is active,target killing is active,anarchy is full , leadership has flaws so how can you compare both these countries, for bringing customers you will have to offer a stunning rate its your need . investor do not eat grass he know very where he should invest, he will never invest his money for 3 or 4 % interest in a country where he is not conform to get benefit even his money back so it is a risk played by all investors in the greed of this huge interest rate and our govt as well now if govt take full advantage of this money so she would not only be able to pay interest but can also get premium for it self dude. so it was necessary to give him such offer that he would not be able to deny for our bonds . and for talking loan from IMF, GOVT is collecting some 9 billion dollars which she will have to show to IMF in next 3 month so could you be able to get such huge amount in 3 months by just 3,4and 5% interest rate . hope understood.