ISLAMABAD, Feb 11: Pakistan on Wednesday hinted at increasing its five-year Eurobond size from the proposed $500 million and also issuing similar bonds every year from now on.

"The market is telling us that we could increase it but we have not made a decision (as yet). That will be done on Thursday," said an official statement quoting Finance Minister Shaukat Aziz as saying in Hong Kong.

Mr Aziz, who is scheduled to formally launch Pakistan's Eurobonds on Thursday in London, said: "We want our bonds to be a regular feature in the market so that investors develop an interest and there are enough room for secondary market." He said ideally he wanted one new issue per year.

He said the government was very comfortable with the investor's response so far and this could mean that the size would be increased. Pakistan is returning to the international capital market for the first time in six years with a view to diversifying its funding sources and providing investors more opportunities to buy into its improving economy by becoming a more regular issuer.

The final price will be fixed on Thursday in London, but lead managers, Deutsche Bank and JP Morgan and co-lead manager ABN-Amro, have given investors an indicative price of 6.875 per cent.

The statement said this was 42.5 basis points tighter than the 2009 Philippine sovereign, which has a three-notch higher credit rating. However, anecdotal evidence of more than $500 million in orders after one day of marketing suggested it would be no surprise to see the price guidance tightened further.

Shaukat Aziz said this was the right time for the country to borrow for several reasons, including the interest-rate environment was favourable, Pakistan's credit rating had been raised and its macro-economic performance had shown a turn-around over the past four years.

Pakistan is one of the stronger macroeconomic stories, a country with very good balance of payments position and an ability to repay, the minister said noting that fiscal deficit would drop to four per cent of gross domestic product this year from 4.4 per cent last year and 6.6 per cent four years ago.

APP adds: Finance Minister Shaukat Aziz and State Bank Governor Dr Ishrat Hussain arrived in London on Wednesday to launch the Eurobonds on Thursday.