CDB provides $1 billion loan to shore up Pakistan’s foreign exchange reserves in June 2021

On June 28, 2021, China Development Bank signed a $1 billion term facility (loan) agreement with the State Bank of Pakistan to shore up the country’s foreign exchange reserves (captured via Project ID#92618). The loan carried the following borrowing terms: an interest rate of 12-month LIBOR plus a 3% margin and a 2-year maturity (final maturity date: June 28, 2023). The loan fully disbursed and it was repaid ahead of schedule (on or around June 10, 2023). The lender agreed to waive the prepayment penalty that is typically charged when a borrower decides to repay ahead of schedule. Then, on June 16, 2023, China Development Bank signed a $1 billion rollover term facility (loan) agreement with the State Bank of Pakistan to shore up the country’s foreign exchange reserves. The borrowing terms of the loan are unknown.

Additional details

1. The all-in interest rate was calculated by adding 3% to average 12-month LIBOR in June 2021 (0.243%). 2. The EAD Project ID number is CDB28062021. 3. One official source claims that the loan’s interest rate was 6-month LIBOR plus a 3% margin. Another official source claims that the loan’s interest rate was 12-month LIBOR plus a 3% margin. This issue warrants further investigation. 3. One official source indicated that the loan's original maturity was 1 year rather than 2 years, which suggests that a debt rescheduling (maturity extension) may have taken place. This issue warrants further investigation.

Number of official sources

4

Number of total sources

11