Pakistan's Sovereign Credit Rating Upgraded by S&P Global

Strategic Insights -

S&P Global has upgraded Pakistan's sovereign credit rating to 'B-' from 'CCC+', citing the country's stabilized finances and reserves bolstered by International Monetary Fund (IMF) support. The rating agency also placed Pakistan on a 'stable' outlook, predicting continued economic recovery and government efforts to enhance revenue will stabilize fiscal and debt metrics. Pakistan's longer-dated international bonds rallied after the upgrade, with gains of 1.6 cents to 1.0 cent, according to Tradeweb data.

Key Takeaways:

  • S&P Global upgraded Pakistan's sovereign credit rating to 'B-' from 'CCC+', citing stabilized finances and IMF support.
  • The rating agency placed Pakistan on a 'stable' outlook, forecasting continued economic recovery and government efforts to enhance revenue.
  • Pakistan's longer-dated international bonds rallied after the upgrade, with the 2051 maturity gaining 1.6 cents to 84.85 cents on the dollar.
  • Finance Minister Muhammad Aurangzeb urged Moody's to improve Pakistan's credit rating and facilitate its return to international capital markets at favorable conditions.
  • The IMF objected to Pakistan's energy ministry proposal to provide 8,000-megawatt surplus electricity on cheaper rates to industries.
  • The IMF linked approval of the marginal energy package to 100% recovery of dues, which the energy ministry failed to meet.
  • A revised package of new proposals will be discussed with the IMF delegation in the next round of economic review talks.

Statistics:

  • Pakistan's sovereign credit rating was upgraded to 'B-' by S&P Global.
  • The rating agency placed Pakistan on a 'stable' outlook.
  • Pakistan's longer-dated international bonds gained 1.6 cents to 84.85 cents on the dollar.
  • The 2031 and 2036 maturities also gained around 1 cent.
  • MATLAB Finance Minister Muhammad Aurangzeb urged Moody's to improve Pakistan's credit rating.
  • The IMF objected to Pakistan's energy ministry proposal to provide 8,000-megawatt surplus electricity on cheaper rates to industries.
  • The IMF linked approval of the marginal energy package to 100% recovery of dues.

Sources:

  • S&P Global (no date provided)
  • Tradeweb (no date provided)
  • Pakistan Ministry of Energy (no date provided)
  • International Monetary Fund (no date provided)
  • Finance Minister Muhammad Aurangzeb (no date provided)