LONDON - Sovereign dollar bonds issued by Pakistan dropped as much as 12 cents in the dollar on Tuesday to hit fresh record lows after ratings agency Fitch cut its outlook to "negative".
Suffering the sharpest losses, the 2025 bond saw bids as low as 49 cents in the dollar, while longer dated issues such as the 2051 bond were bid at just over 42 cents in the dollar, Tradeweb data showed.
The premium demanded by investors to hold the bonds blew out to record levels, with the sovereign spread over U.S. Treasuries widening to 1,820 basis points on the JPMorgan EMBI Global Diversified index.
Ratings agency Fitch revised its outlook on the country to negative from stable, citing a deterioration in Pakistan's external liquidity position and financing conditions as well as the risks from renewed political volatility.
(Reporting by Karin Strohecker; editing by Dhara Ranasinghe)