The government has been able to raise Rs200 billion through sukuk bonds for the first time in Pakistan’s history, 24NewsHD TV channel reported on Wednesday.

According to sources in the Ministry of Finance, these bonds were issued at a rate less than that of KIBOR (Karachi Interbank Offered Rate), which will help the government save an overall amount of Rs18 billion over 10 years on debt servicing.

Adviser to the Prime Minister on Finance and Revenue Abdul Hafeez Shaikh too shared this news in a tweet, saying the goal was achieved “through competitive book building” at the Pakistan Stock Exchange.

https://twitter.com/a_hafeezshaikh/status/1262816095913861122

He described it as an excellent team effort by the Ministry of Finance’s Debt Office, Security and Exchange Commission of Pakistan, State Bank of Pakistan and Pakistan Stock Exchange.

Last month, the government had floated debt of a state-owned entity Power Holding Ltd for ordinary investors through the stock market for the first time in Pakistan.

The government will use the funds raised from these bonds to fulfil its financing requirements including settlement of the circular debt.

The value of each sukuk bond was fixed at Rs5,000 with the minimum bid size of 20 units or Rs100,000.

Prime Minister Imran Khan tweeted, “Landmark financial innovation with Rs 200 bn Sukuk issued through competitive book building at PSX. Oversubscribed by 170%, reflecting a strong market confidence in our Govt's policies. As a result govt saved Rs18 billion - savings that can now be used for welfare of the people.”

https://twitter.com/ImranKhanPTI/status/1263056961987391488