Islamabad December 2 2022: Pakistan is set to pay a $1 billion bond on Friday, dodging the risk of a near-term default even as worries over its ability to pay its long-term debt remains, reported by Bloomberg.
The government plans to make the payment on the sukuk dollar bonds due Dec. 5 three days before its maturity, State Bank of Pakistan Governor Jameel Ahmad said at a briefing last week. The bonds have recovered to 97.90 cents on the dollar, close to the par value of 100, after dropping to 81.86 cents in October.
While Pakistan is expected to meet its short-term debt obligations, its longer-term bonds are still trading at distressed levels as investors worry over its ability to emerge from a crisis. Moody’s Investors Service and Fitch Ratings downgraded the nation deeper into junk 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 evaluates how much the rebuilding will cost. Pakistan needs to repay about $25 billion in the year started July, though most of it has been rolled over or paid, Jameel has said.
