Friday, Aug 15, 2008
SINGAPORE (Dow Jones)--Pakistan steel manufacturer Amreli Steels (Pvt.) Ltd. is looking to raise up to PKR1.3 billion (US$17 million) in Islamic bonds, a person familiar with the deal said Friday.
It has already signed the deal with lead managers Faisal Bank and Meezan Bank with disbursement expected in September, the person said.
The eight-year deal, comprising PKR1 billion with a greenshoe option to raise a further PKR300 million, is priced at 1.75 percentage points over the Karachi interbank offered rate.
The deal comes a week after Eden Builders Ltd. priced PKR2.0 billion in a five-and-a-half-year sukuk at 2.25 percentage points over Kibor.
The flow of primary sales of Islamic bonds, or sukuk, has slowed somewhat in Pakistan recently after a hectic pace at the start of the year as political and economic concerns have mounted.
Falling liquidity has also required borrowers to pay more for their borrowing. Amreli was originally looking at paying a 1.25-percentage-point premium while Eden Builders was looking at paying a 2.00-percentage-point spread.
A bank involved in the two deals was optimistic that the situation would improve, saying the prospect that President Pervez Musharraf may soon step aside is a positive development that should allow the government to focus on addressing the country's economic problems.
"I think it is improving now. One or two weeks or months ago, there wasn't any hope of getting a transaction closed but now, people are now talking to us again," he said.
-By Karen Lane, Dow Jones Newswires; 65 6415-4043; karen.lane@dowjones.com
(END) Dow Jones Newswires
15-08-08 0757GMT
