Pakistan Raises $3bn Through Landmark Eurobond Issue

KARACHI: Pakistan has successfully raised $3 billion through a landmark dual-tranche Eurobond transaction on Thursday, marking the largest international bond issuance in the country’s history in a single transaction.

According to the Ministry of Finance, the offering attracted nearly $6 billion in orders, almost twice the amount issued, reflecting strong demand from a broad and geographically diversified base of institutional investors.

The transaction comprises a $1.75 billion 5.5-year Eurobond carrying a coupon of 7.50 per cent and a $1.25 billion 10-year Eurobond with a coupon of 7.90 per cent.

The strong demand, particularly for the longer-term 10-year instrument, was described as a sign of renewed investor confidence in Pakistan’s improving macroeconomic and credit fundamentals.

The issuance also marks an important step in Pakistan’s broader strategy to regain and diversify access to international capital markets. Following its inaugural Panda Bond and improvements in its sovereign credit profile, the transaction is the first issuance under Pakistan’s renewed Global Medium-Term Note (GMTN) Programme.

According to statement, the government’s objective extends beyond raising additional funds and includes active management of sovereign liabilities through diversified funding sources, longer debt maturities and reduced refinancing and rollover risks.

Pakistan is also seeking opportunities to replace shorter-term and more expensive debt with longer-duration financing where economically beneficial, as part of efforts to improve the country’s overall sovereign debt profile.

The Ministry of Finance acknowledged the role of the Joint Bookrunners — Citi, Deutsche Bank, Emirates NBD, MUFG and Standard Chartered — in managing and executing the transaction.

The strong order book and participation by institutional investors across global markets were presented as a market-based signal of confidence in Pakistan’s medium- and long-term economic outlook.

The development comes as Pakistan continues efforts to strengthen fiscal discipline, pursue structural reforms, improve export competitiveness and boost investment and productivity.

The Finance Minister Mohammad Aurangzeb said the record transaction marks a significant milestone in Pakistan’s efforts to move from economic stabilisation towards sustainable growth, while strengthening its access to global capital markets.