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WAPDA revises bonds rate to 7.25 percent

KARACHI (December 30 2002) : The Water and Power Development Authority (Wapda) has revised its rate of return on Rs 7 billion bonds, to be issued next month, by 75 basis points to 7.25 percent.

According to sources, Wapda had planned to sell these bonds offering 8 percent rate of return a year, meaning central bank discount rate of 7.5 percent plus 0.5 percent. But due to the lowering of yield on 10-year and five-year bonds and rates on treasury bills, the company cut its rate of return on these bonds.

The new rate would be base rate, meaning discount rate of 7.5 percent, less 25 basis points, or 7.25 percent a year.

The advisors and arrangers to this issue are ABN Amro N.V. Pakistan, Muslim Commercial Bank and Khadim Ali Shah Bukhari.

The purpose of this issue is to finance Wapda's various development activities, notably the Ghazi Barotha project and extra high voltage transmission lines.

The issue amount is Rs 5 billion while the Authority would utilise the green-shoe option up to Rs 2 billion.

The tenor is five years and the expected date is next month.

The proceeds from these bonds would be utilised to finance Wapda's development activities notably the $2.2 billion Ghazi Barotha project.

Wapda has already received $1.2 billion for the project from international funding agencies, and plans to raise part of its commitment for the remainder through the 10th issue.

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