KARACHI (March 05 2004): The National Bank of Pakistan (NBP) and Citibank N.A. on Thursday announced successful arrangement and execution of Pakistan's first Coupon Swap transaction on a notional amount of Rs 4.4 billion with Pak-Arab Refinery Limited (Parco).
The transaction provides Pakistan's largest oil refinery with a hedge against interest rate movements.
The introduction of sophisticated financial products in the market requires similar sophistication of the customer. The foresight, dynamism and astute acumen of Parco management and finance teams were the primary driver for success in this transaction.
This landmark transaction has been optimally structured to take advantage of the tremendous relative strengths of the National Bank of Pakistan, the largest local bank in Pakistan and Citigroup, the world's largest financial institution.
More than the provision of an effective hedge, this transaction has added significant value to the domestic financial market.
Its successful execution lays out the framework for other similar transactions. Whereas, the Swap has been executed in Pakistan, it is pertinent to note that all concerned parties have executed International Swap Dealers Association (ISDA) documentation, which is the global standard for such transactions.