- The government is set to make payments on bonds due on Monday.
- The nation’s long-term bonds trade at difficult levels
Pakistan will pay a $1 billion bond on Friday, dodging the risk of a short-term default, even as concerns persist about its ability to repay its long-term debt.
The government plans to make payment on Sukuk dollar bonds due Dec. 5, three days before maturity, State Bank of Pakistan Governor Jameel Ahmad said at a briefing last week. Bonds have rallied to 97.90 cents on the dollar, near the face value of 100, after falling to 81.86 cents in October.
While Pakistan is expected to meet its short-term debt obligations, its long-term bonds are still trading at difficult levels as investors worry about their ability to emerge from a crisis. Moody’s Investors Service and Fitch Ratings downgraded the nation’s rating to the trash in October after devastating floods jeopardized its fiscal health.
Talks with the International Monetary Fund for the next tranche of about $600 million have also been delayed as the nation assesses how much reconstruction will cost. Pakistan needs to pay about $25 billion in the year that began in July, though most of it has been extended or paid, Jameel said.
Source: Bloomberg
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