Government launches first-ever 15-year zero-coupon bond

The Government of Pakistan has taken a new step to improve its financial planning by launching a 15-year zero-coupon bond for the first time. This bond is part of a larger effort to manage debt better and attract new investors.

According to the Finance Ministry, the government raised over Rs 1.2 trillion through a big auction of bonds. Out of this, the new 15-year zero-coupon bond alone raised more than Rs 47 billion due to high demand from investors.

This type of bond is different from regular ones. It doesn’t pay any yearly interest. Instead, investors will get a full payment at the end of 15 years. This helps the government save on yearly payments and focus on long-term financial planning.

The bond was sold at a return rate of 12.7%. Officials said this strong investor interest shows growing trust in Pakistan’s economy and ongoing reforms. They also said that this move is part of a bigger plan to reduce borrowing risks and promote Islamic and long-term financial products.

In addition, yields on other government bonds also went down. This means investors are hopeful that inflation will keep falling and interest rates will decrease in the future. For example, the 5-year bond yield dropped by 44 basis points, while the 10-year bond yield fell by 9 basis points.

This new bond launch shows that Pakistan is working on smart and long-term solutions to manage its debt and support economic growth.

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