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Pakistan Secures Bilateral Commitments to Rollover Debt for a Year
August 7, 2024
Pakistan has secured commitments from China, Saudi Arabia and the UAE to rollover its debt for a year. This is expected to boost its chances in securing a new $7bn loan program from the IMF by end-August. The Finance Minister Muhammad Aurangzeb said that the amount of rollovers will be the same as last year. Over the last few years, about $12bn in bilateral loans have been extended to Pakistan. Separately, Pakistan has also requested debt relief from China for power plants under its Belt and Road Initiative. Last week, Pakistan received an upgrade by Fitch to CCC+.
In related news, WAPDA has been upgraded to CCC+ on the back of the sovereign’s upgrade. The state-owned hydroelectric power generation company is rated on par with the sovereign as it is expected to get extraordinary support from Pakistan in case the need arises.
Pakistan’s dollar bonds were stable, yielding ~12.5% and WAPDA 7.5% 2031s were also stable at 75.1, yielding 13.4%.
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