17 February 2004	Tuesday	25 Zilhaj 1424

ISLAMABAD, Feb 16: Finance Minister Shaukat Aziz said on Monday that Pakistan would go for swapping its recently launched $500 million five-year fixed rate Eurobond issue to floating rate that would help bring down the pricing by a minimum of 2 per cent from existing 6.75 per cent.

The process for swapping of Eurobond pricing from fixed rate to floating rate has begun and hopefully in two weeks time bids for swapping from international financial houses and banks would be received, Mr Aziz told a press conference.

"I am confident that what we have got in the shape of fixed rate of 6.75 per cent for five years maturity is far better than what we or the Lead Managers of the Bond were expecting but to silence the criticism I want to tell you that this is not the end, we would continue to take this issue to international markets to get even better pricing," he said.

He said that improved rating coupled with our explanations to some over 200 investors during the road shows and marketing of the issue by lead managers had led to heavy oversubscription of the bond with bids totalling around $2 billion.

Responding to a question, Mr Aziz said, yes there were questions and not concerns, by the international investors regarding Pakistan's nuclear programme, relations with India and Afghanistan, which were duly replied but the focus was on country's economic policies.

Mr Aziz said that all this money to be raised through offering of the bond would be utilized for pre-payment of expensive debts, which carried the interest rate ranging from 6 per cent to 7 per cent but there was no loan that had interest of over 8 per cent.

"We need to stand on our own feet now and depart from the history of borrowing expensive loans on tranche to tranche basis and conditions attached," he said. He said this would have a positive spill-over effect in many ways and attract foreign direct investment and this successful launching had further strengthened Pakistan's economy.

He said that there were many sources which were to be tapped in the future and this launching of $500 million Eurobond was to establish Pakistan's credibility and check the confidence of international capital market it has in Pakistan's economy.

He said the issue that was heavily oversubscribed was much better than many countries having much improved credit rating than Pakistan had attracted. European investors got 54 per cent share, Asia 24 per cent, 11 per cent by offshore US investors, and 11 per cent by Middle East investors.

"I am confident that these financial institutions, which had reposed confidence in Pakistan's issue would also invest in equities and investment will come in stock markets," he said.