How Moody's awards Pakistan's Sukuk offering a B3 rating.

^{Moody's Investors Service has assigned a "B3 backed senior unsecured rating" to Pakistan's proposed US dollar-denominated trust certificates (Sukuk).}^{According to Moody's, the trust certificates will be direct, unconditional, and unsubordinated obligations of the Pakistan government.}^{International bond was offered through Pakistan Global Sukuk Programme Company Limited's Trust Certificate Issuance Program, according to a statement.}

^{Pakistan has tasked four banks with arranging investor meetings ahead of the planned issuance of a seven-year tenor Sukuk, with analysts expecting foreign investors seeking higher returns to be more interested in the country's debt.}

^{The government has mandated Credit Suisse, Deutsche Bank, Dubai Islamic Bank, and Standard Chartered Bank as joint lead managers and joint book runners to organize investor calls for the sale of Sukuk, Bloomberg reported, citing a source familiar with the matter.}

^{Pakistan pitches a $1 billion Islamic bond to global investors.}

^{KARACHI: Analysts expect a higher appetite for Pakistan's debt from global investors seeking higher returns ahead of the planned issuance of US dollar-denominated Sukuk. Pakistan has mandated four banks to arrange investor meetings.}

^{Moody's gave the Sukuk offering a B3 rating, and the International Monetary Fund (IMF) announced an agenda for its sixth review of Pakistan's Extended Fund Facility on 28 January.}

^{In a report citing a source familiar with the matter, Bloomberg reported that Credit Suisse, Deutsche Bank, Dubai Islamic Bank, and Standard Chartered Bank were mandated by the government to organize investor calls for the sale of Sukuk on Tuesday.}

^{A benchmark issuance would follow, subject to market conditions, it added. The expected benchmark issuance was $1 billion.}

^{Moody's assigns a 'B-' Rating.}

^{Pakistan's global Sukuk certificates are rated a "B-" by Fitch Ratings, according to a statement from the credit rating agency Tuesday.}

^{In its statement, Fitch said that the rating is sensitive to any changes in Pakistan's Long-Term Foreign-Currency Issuer Default Rating (IDR) which it affirmed as 'B-' with a Stable Outlook in May 2021.}

^{What will be the method of approaching investors?}

^{According to the news, the lead arrangers would begin communicating with investors via two-way calls or roadshows, a combination of one-to-one meetings and group sessions, to learn about the demand for the bonds and the pricing they expect.}

^{A roadshow helps meet investors face-to-face and market a new transaction. They suggest holding roadshows in two to three countries.}

^{The government will move quickly to execute the transaction if it receives orders from investors. Therefore, it will all depend on how investors and markets respond to the separate meetings and roadshows. IMF loan program was resumed, pricing would improve," said a senior investment banker.}

^{There is no indication yet whether the government will offer bonds directly or through the book-building process. An investor's buy orders are collected during the book-building process.}

^{How can Pakistan improve its rating?}

^{The rating could increase if Pakistan's ongoing fiscal reforms "expand the government's revenue base, make the debt more affordable, and reduce its debt burden beyond our current expectations", the statement said.}

^{A structural reduction in external vulnerability risks, including through higher levels of foreign exchange reserve adequacy that were sustainable and/or increased economic competitiveness that was to lift export prospects, would also put upward pressure on the rating.}

^{What are international bonds?}

^{An international bonds are a debt obligation issued by non-domestic entities in a country. The government can use them to finance its expenditures. Islamic finance uses Sukuk bonds that comply with Sharia.}