PNG Government looking at sovereign bonds issue

PORT MORESBY, (THE NATIONAL) – An issue of a national sovereign bond in the range of US$500 million (K1.6 billion) to US$1 billion (K3.26 billion) is expected to be announced next month, says Treasury Secretary Dairi Vele.

He said the government was working on it.

“When we were looking at this two years ago, the oil price was down at USD$40 (K130),” Vele said. “Now look at this good story with the recovering price around K228 (US$70).

“It is a competitive market.

“There are other people out there trying to seek financing for their country, but PNG has a good story to tell, especially with the reforms we have taken and the major resource projects coming up.

“We should have some good news by September. Our credit rating will factor. In the past, it has heavily been based on oil price, so again it should be a promising time for us.”

Deputy Prime Minister and Treasurer Charles Abel said they were in the most advanced stages of conducting the country’s first sovereign bond later this year.

“We are raising these external funds so that we can shift our borrowings from the high cost and saturated domestic market,” he said.

“This will not only help our budget but will mean that we can start releasing more funds to line ministries to improve front line service delivery,” he said.

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