{"id":78065,"date":"2025-06-19T21:51:23","date_gmt":"2025-06-19T16:51:23","guid":{"rendered":"https:\/\/dailyausaf.com\/en\/?p=78065"},"modified":"2025-06-19T22:40:37","modified_gmt":"2025-06-19T17:40:37","slug":"govt-introduces-first-ever-15-year-zero-coupon-bond","status":"publish","type":"post","link":"https:\/\/dailyausaf.com\/en\/business\/govt-introduces-first-ever-15-year-zero-coupon-bond\/","title":{"rendered":"Govt introduces first ever 15-year-zero coupon bond"},"content":{"rendered":"

KARACHI: The<\/span>\u00a0government\u00a0<\/span>sold<\/span> its first-ever 15-year zero-coupon bond on Wednesday to<\/span> diversify its investor base with creative financing <\/a><\/span>instruments<\/span>\u00a0and\u00a0<\/span>enhance<\/span>\u00a0debt management.<\/span><\/p>\n

The government\u00a0was<\/span>\u00a0<\/span>able<\/span>\u00a0<\/span>to<\/span>\u00a0<\/span>raise more than\u00a0<\/span>Rs1.2 trillion\u00a0<\/span>from<\/span>\u00a0a\u00a0<\/span>large<\/span> auction of government bonds, the finance ministry <\/span>statement\u00a0<\/span>said<\/span>.\u00a0<\/span>It<\/span>\u00a0<\/span>involved<\/span> the\u00a0<\/span>issuance<\/span>\u00a0<\/span>of a new 15-year zero-coupon bond,\u00a0<\/span>a<\/span>\u00a0first\u00a0<\/span>for<\/span>\u00a0<\/span>Pakistan. The bond\u00a0<\/span>was<\/span>\u00a0<\/span>in\u00a0<\/span>strong demand\u00a0<\/span>by<\/span>\u00a0investors<\/span>\u00a0<\/span>and<\/span>\u00a0<\/span>raised<\/span>\u00a0<\/span>more than\u00a0<\/span>Rs47 billion, it added.<\/span><\/p>\n

The bond\u00a0was<\/span>\u00a0<\/span>priced\u00a0<\/span>at 12.7 per cent.\u00a0<\/span>“<\/span>This new bond does not pay interest\u00a0<\/span>annually<\/span>.<\/span>“<\/span>\u00a0<\/span>Rather<\/span>, investors\u00a0<\/span>are<\/span>\u00a0<\/span>paid\u00a0<\/span>a lump sum <\/span>after<\/span>\u00a0<\/span>15 years.\u00a0<\/span>It<\/span>\u00a0<\/span>aids<\/span>\u00a0the government\u00a0<\/span>in<\/span>\u00a0<\/span>lowering\u00a0<\/span>short-term\u00a0<\/span>payments<\/span>\u00a0and\u00a0<\/span>better<\/span>\u00a0<\/span>planning\u00a0<\/span>finances<\/span>.<\/span><\/p>\n

The\u00a0<\/span>positive<\/span>\u00a0response\u00a0<\/span>indicates<\/span>\u00a0that investors\u00a0<\/span>have<\/span>\u00a0<\/span>faith<\/span>\u00a0in Pakistan<\/span>‘<\/span>s economy and reforms<\/span>,”<\/span>\u00a0it\u00a0<\/span>added<\/span>.\u00a0<\/span>“<\/span>This\u00a0<\/span>is part of the government<\/span>‘<\/span>s\u00a0<\/span>overall<\/span>\u00a0strategy to\u00a0<\/span>lower<\/span>\u00a0<\/span>risks of\u00a0<\/span>borrowing<\/span>,\u00a0<\/span>lengthen<\/span>\u00a0<\/span>debt<\/span>\u00a0repayment\u00a0<\/span>terms<\/span>, and\u00a0<\/span>encourage<\/span>\u00a0Islamic and long-term\u00a0<\/span>products<\/span>,”<\/span>\u00a0it added.<\/span><\/p>\n

Returns<\/span>\u00a0on other government\u00a0<\/span>securities<\/span>\u00a0also\u00a0<\/span>fell<\/span>,\u00a0<\/span>reflecting<\/span>\u00a0optimism in\u00a0<\/span>the\u00a0<\/span>financial markets\u00a0<\/span>regarding<\/span>\u00a0<\/span>the<\/span>\u00a0<\/span>decline in\u00a0<\/span>inflation and lower interest rates in the future. <\/span>Yield\u00a0<\/span>fell<\/span>\u00a0in the fixed rate Pakistan Investment Bonds<\/a> (5-year down 44bps, 10-year down 9bps),\u00a0<\/span>reflecting<\/span>\u00a0investor\u00a0<\/span>optimism<\/span>\u00a0<\/span>regarding<\/span>\u00a0monetary easing.<\/span><\/p>\n

Pakistan’s<\/span>\u00a0<\/span>debt,<\/span>\u00a0<\/span>says\u00a0<\/span>the government,\u00a0<\/span>is\u00a0<\/span>becoming more stable. The\u00a0<\/span>domestic<\/span>\u00a0<\/span>debt\u00a0<\/span>repayment period, the average of which <\/span>was<\/span>\u00a0<\/span>2.7 years\u00a0<\/span>a<\/span>\u00a0year\u00a0<\/span>ago, has now grown\u00a0<\/span>to 3.75 years<\/span>,\u00a0<\/span>easing<\/span>\u00a0the pressure to repay loans\u00a0<\/span>sooner<\/span>.<\/span><\/p>\n

\u00a0<\/span>In addition<\/span>,\u00a0<\/span>pension funds and insurance\u00a0<\/span>firms,<\/span>\u00a0<\/span>in<\/span>\u00a0<\/span>addition<\/span>\u00a0<\/span>to<\/span>\u00a0<\/span>the\u00a0<\/span>banks, are now <\/span>also\u00a0<\/span>investing in\u00a0<\/span>the\u00a0<\/span>government<\/span>‘s<\/span>\u00a0bonds. This\u00a0<\/span>diversifies<\/span>\u00a0<\/span>financial risk and\u00a0<\/span>makes<\/span>\u00a0the local investor base<\/span>\u00a0deeper<\/span>.<\/span><\/p>\n

Finance Minister Senator Muhammad Aurangzeb\u00a0stated<\/span>:\u00a0<\/span>“<\/span>This is a\u00a0<\/span>significant<\/span>\u00a0step\u00a0<\/span>in making\u00a0<\/span>the<\/span>\u00a0financial system\u00a0<\/span>of\u00a0 Pakistan <\/span>stronger and more resilient. <\/span><\/p>\n

We are\u00a0<\/span>pioneering<\/span>\u00a0new,\u00a0<\/span>intelligent<\/span>\u00a0<\/span>means<\/span>\u00a0of borrowing that\u00a0<\/span>decrease<\/span>\u00a0risk and\u00a0<\/span>provide<\/span>\u00a0investors\u00a0<\/span>with<\/span>\u00a0<\/span>better choices<\/span>. Our <\/span>objective<\/span>\u00a0is to\u00a0<\/span>deal<\/span>\u00a0<\/span>with\u00a0<\/span>public debt\u00a0<\/span>prudently<\/span>,\u00a0<\/span>develop<\/span>\u00a0Islamic finance, and\u00a0<\/span>bring<\/span>\u00a0<\/span>in\u00a0<\/span>more long-term investment to\u00a0<\/span>assist<\/span>\u00a0<\/span>in\u00a0<\/span>the\u00a0<\/span>economic growth<\/span>\u00a0<\/span>of<\/span>\u00a0the\u00a0<\/span>country.”<\/span><\/p>\n

The\u00a0finance ministry is also\u00a0<\/span>developing<\/span>\u00a0<\/span>more products to\u00a0<\/span>enable<\/span>\u00a0<\/span>common<\/span> citizens to invest in government bonds, particularly <\/span>\u00a0Islamic ones,\u00a0<\/span>for<\/span>\u00a0<\/span>promoting<\/span>\u00a0savings and financial inclusion<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

KARACHI: The\u00a0government\u00a0sold its first-ever 15-year zero-coupon bond on Wednesday to diversify its investor base with creative financing instruments\u00a0and\u00a0enhance\u00a0debt management. The government\u00a0was\u00a0able\u00a0to\u00a0raise more than\u00a0Rs1.2 trillion\u00a0from\u00a0a\u00a0large auction of government bonds, the finance ministry statement\u00a0said.\u00a0It\u00a0involved the\u00a0issuance\u00a0of a new 15-year zero-coupon bond,\u00a0a\u00a0first\u00a0for\u00a0Pakistan. The bond\u00a0was\u00a0in\u00a0strong demand\u00a0by\u00a0investors\u00a0and\u00a0raised\u00a0more than\u00a0Rs47 billion, it added. The bond\u00a0was\u00a0priced\u00a0at 12.7 per cent.\u00a0“This new bond does not pay […]<\/p>\n","protected":false},"author":9,"featured_media":59069,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[29594,29595],"class_list":["post-78065","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-creative-finance-department","tag-pakistan-investment-bonds"],"_links":{"self":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/posts\/78065","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/comments?post=78065"}],"version-history":[{"count":2,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/posts\/78065\/revisions"}],"predecessor-version":[{"id":78071,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/posts\/78065\/revisions\/78071"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/media\/59069"}],"wp:attachment":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/media?parent=78065"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/categories?post=78065"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/tags?post=78065"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}