Pakistan raises record $3 billion through dual-tranche Eurobond
Government issues $1.75 billion 5.5-year Eurobond at 7.50% and $1.25 billion 10-year bond at 7.90%; transaction attracts nearly $6 billion demand, twice the amount issued in global orders
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Pakistan has successfully raised $3 billion through a dual-tranche Eurobond transaction, marking the largest-ever international bond issuance by the country in a single transaction, the Ministry of Finance said.
The transaction attracted nearly $6 billion in orders, almost twice the amount issued, from a broad and diversified base of institutional investors across global markets and continents.
According to the ministry, Pakistan issued a $1.75 billion Eurobond with a 5.5-year maturity at a coupon rate of 7.50%, along with a $1.25 billion 10-year Eurobond carrying a coupon of 7.90%, taking the total issuance to $3 billion.
The Finance Ministry said the transaction marked a major milestone in Pakistan’s renewed and increasingly diversified access to international capital markets, with the scale of demand reflecting investor confidence and the country’s ability to access global funding markets at significant scale.
It said competitive pricing across both maturities, together with strong demand extending to the 10-year tenor, demonstrated Pakistan’s ability to mobilise sizeable longer-term financing as international investors reassess the country’s improving macroeconomic and credit fundamentals.
The transaction also represents an important milestone in Pakistan’s broader “Road to Market” strategy.
Following the successful inaugural Panda Bond and improvements in Pakistan’s sovereign credit profile, the Eurobond transaction is the first issuance under the country’s renewed strategic Global Medium-Term Note (GMTN) Programme, creating a platform for diversified access to international capital markets.
The ministry said the objective was not simply to raise additional debt. Pakistan is pursuing a broader strategy of active sovereign liability management aimed at diversifying financing sources, extending maturities, reducing refinancing and rollover risks, and creating opportunities to replace shorter-term and more expensive obligations with longer-duration, competitively priced financing where economically beneficial.
Pakistan has already pursued substantial early retirement of domestic debt ahead of maturity, according to the statement. Extending that approach to external financing forms part of the same strategy of improving the sovereign debt profile.
The ministry said the approach was focused on borrowing on better terms, extending maturities, diversifying funding and reducing refinancing risks, distinguishing active sovereign balance-sheet management from simply raising additional debt.
The Debt Management Office of the Ministry of Finance played a pivotal role in delivering the transaction, the statement said.
Citi, Deutsche Bank, Emirates NBD, MUFG and Standard Chartered acted as joint bookrunners for the issuance.
The government also acknowledged the support of other stakeholders, including legal counsels involved in the transaction.
The ministry said the issuance followed improvements in Pakistan’s economic trajectory over the past three years, which had increasingly been recognised through successive sovereign credit-rating upgrades and the country’s renewed access to international capital markets.
It said the depth of the order book, its geographically diversified institutional investor base and substantial demand for a 10-year Pakistani sovereign instrument provided a market-based signal of renewed confidence in the country’s medium- and long-term economic trajectory.
The ministry, however, said the economic reform process was not complete and that fiscal discipline, structural reforms, export competitiveness, investment and productivity improvements would need to continue and deepen.
It said Pakistan was entering the next stage from a materially stronger position than three years ago, following a transition from crisis towards stabilisation, reforms, improved credibility, ratings upgrades, investor confidence and renewed access to global capital.
In April, the government initially raised $500 million through a three-year Eurobond under its GMTN Programme at a coupon rate of 6.975%. The issuance was later increased to $750 million through a $250 million green-shoe option following stronger-than-expected investor demand. The bond is due to mature in April 2029.
Pakistan also repaid a $1.4 billion Eurobond that matured in April, enabling the government to re-establish a pricing benchmark in international debt markets after several years of relying largely on multilateral, bilateral and commercial financing.
The ministry described nearly $6 billion in global investor demand and the record $3 billion raised in a single transaction as a landmark in Pakistan’s transition from economic stabilisation towards sustainable growth and a stronger platform for future access to international capital markets.
Government issues $1.75 billion 5.5-year Eurobond at 7.50% and $1.25 billion 10-year bond at 7.90%; transaction attracts nearly $6 billion demand, twice the amount issued in global orders
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