ISLAMABAD: Pakistan has raised $3 billion through a landmark dual-tranche Eurobond transaction, the Ministry of Finance said, marking the country’s largest-ever international bond issuance in a single transaction.
The transaction attracted nearly $6 billion in orders from institutional investors across global markets, almost twice the amount Pakistan issued.
“The successful transaction marks a major milestone in Pakistan’s renewed and increasingly diversified access to international capital markets, demonstrating strong investor confidence and Pakistan’s ability to access global funding markets at significant scale,” the Ministry of Finance said.
The transaction comprises a $1.75 billion, 5.5-year Eurobond carrying a 7.5% coupon and a $1.25 billion, 10-year Eurobond with a 7.9% coupon.
The ministry said that strong demand for the longer-dated 10-year bond demonstrates Pakistan’s ability to mobilize sizeable longer-term financing as international investors reassess the country’s macroeconomic and credit fundamentals.
Part of broader market strategy
The ministry said that the transaction represents an important milestone in Pakistan’s broader “Road to Market” strategy and is the first issuance under the country’s renewed strategic Global Medium-Term Note (GMTN) Program.
The program aims to create a platform for more diversified access to international capital markets, following the successful inaugural Panda Bond and improvements in Pakistan’s sovereign credit profile.
“The objective is not simply to raise additional debt,” the ministry said, adding that Pakistan is pursuing a broader strategy of active sovereign liability management.
The strategy seeks to diversify financing sources, extend maturities, reduce refinancing and rollover risks, and, where economically beneficial, replace shorter-term and more expensive obligations with longer-duration financing, according to the ministry.
“Borrow better. Extend maturities. Diversify funding. Reduce refinancing risk. Improve the sovereign debt profile,” the ministry said.
Ministry highlights investor confidence
The Ministry of Finance said the depth of the order book, geographically diversified institutional investor base and substantial demand for the 10-year sovereign instrument provide a strong market-based signal of renewed confidence in Pakistan’s medium- and long-term economic trajectory.
It said Pakistan’s improving economic trajectory has also been reflected in successive sovereign credit-rating upgrades and renewed access to international capital markets.
“Three years of rebuilding credibility; nearly US$6 billion of global investor demand, and a record US$3 billion issued in a single transaction, it is a landmark moment in Pakistan’s journey from economic stabilization toward sustainable growth,” the ministry said.
The ministry, however, said the journey was not complete, with fiscal discipline, structural reforms, export competitiveness, investment and productivity improvements remaining key priorities.
It also acknowledged the role of the Debt Management Office and appreciated the joint bookrunners, Citi, Deutsche Bank, Emirates NBD, MUFG and Standard Chartered, for managing and executing the transaction.