Case
THE DILEMMA OF OVERSUBSCRIPTION
INDUSTRY :-
AREA :FINANCE
ORGANIZATION :-
LENGTH :20
LUMS No :02-633-2015-1
PUBLICATION YEAR : 2015
ABSTRACT:
Pakistan issued the Eurobond in April 2014 after a seven-year break from the international capital market. The Eurobond was subscribed about three times over;the initial intended amount was US$500 million whereas the amount subscribed was US$2 billion.The joint lead managers involved with the issuance of the Eurobond, which included Citibank, Deutsche Bank, Bank of America Merrill, KASB Bank and Barclays, decided that the five-year and ten-year tenure bonds have to be floated at a fixed rate of 7.25 and 8.25 percent, respectively. The officials of the Ministry of Finance indicated that the Eurobond was necessary to replenish the diminishing foreign exchange reserves, to meet IMF conditionalities of the Extended Fund Facility (EFF) and to make the rupee stronger in the international market.