Circulars/Notifications - Domestic Market & Monetary Management Department  
 DMMD Circular No. 16 of 2019

June 25, 2019 


The Presidents/Chief Executive Officers
All Banks/Primary Dealers

Floating Rate Pakistan Investment Bonds

Please refer to DMMD Circular no. 09 dated May 07, 2018, in which detailed guidelines regarding issuance and other operational details of floating rate Pakistan Investment Bonds (PIBs) were specified.

Following changes have been made to the instructions regarding determination of the floating rate coupon:

 B – Determination of Floating Rate Coupon
Ref. No. Current Instruction New Amended Instruction
B-1
The coupon rate on the floating rate PIBs will be equal to the benchmark rate plus/minus a margin decided in the auction. Benchmark rate would be the weighted average yield of the 6-month Market Treasury Bills (MTBs) as determined in the latest successful 6-month MTB auction held prior to the floating rate PIB’s auction and/or the start of the coupon period.

 

The coupon rate on the floating rate PIBs will be equal to the benchmark rate plus/minus a margin decided in the auction. Benchmark rate would be the weighted average yield of the 6-month Market Treasury Bills (MTBs) as determined through cut-off in the latest MTB auction held prior to the floating rate PIB’s auction and/or the start of the coupon period. In case, the latest held auction of 6-month MTBs is either rejected or there is no participation from the market, the average of 6-month PKRV (i.e. 121-180 days) applicable for last five working days before the start of the coupon period will be used as an alternate benchmark.

 

The above instructions will be effective immediately for determination of future coupons of all existing and new issuances of floating rate PIBs.

All other instructions on the subject will remain unchanged.


 Yours truly,


(Rizwana Rifat)
Senior Joint Director




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