New York July 27 2022: The PAKISTAN 5.625% December 2022 bond will likely get paid says JP Morgan in its special research report on Pakistan.
They think that short-dated bonds with attractive carry could play a part in an investor’s portfolio, providing the opportunity to park high cash balances amid the multitude of global macro risks. As a base case authorities will maintain their external debt servicing ability through the end of this year, they think that the PAKISTAN 5.625% December 2022 sukuk bond will likely get paid.
The bonds currently trading at 90 offer are also one of the lowest cash price EM sovereign USD bonds with a maturity less than one year (excluding credits such as Ukraine which recently requested a foreign-debt payment halt).
They flagged in early June that the large sell-off in PAKISTAN was likely warranted and that valuations were still not that cheap considering similar commodity importing and large debt stock peers.