Pakistan raises record $3bn through dual-tranche Eurobond

Pakistan has raised $3 billion through a dual-tranche Eurobond issuance, marking the country's largest-ever single international capital market transaction, according to the Ministry of Finance.

 

The issue attracted nearly $6 billion in investor orders, almost twice the amount offered, reflecting strong demand from institutional investors across international markets.

 

The transaction comprises a $1.75 billion, 5.5-year bond carrying a 7.5% coupon and a $1.25 billion, 10-year bond with a 7.9% coupon.

 

The Finance Ministry said the strong demand for both maturities, particularly the 10-year tranche, demonstrated improved investor confidence in Pakistan's economic and credit outlook and its ability to secure longer-term financing.

 

The latest issuance also represents the first transaction under Pakistan's renewed Global Medium-Term Note (GMTN) Programme. The government said the programme is intended to diversify its external financing sources, extend debt maturities and reduce refinancing and rollover risks.

 

The ministry further said Pakistan's strategy was focused not merely on raising additional debt but on actively managing its sovereign liabilities by replacing shorter-term or more expensive obligations with longer-duration financing where economically beneficial.

 

The latest transaction follows Pakistan's $500 million three-year Eurobond issued in April under the GMTN Programme at a 6.975% coupon. Strong investor demand subsequently allowed the government to increase the issue to $750 million through a green-shoe option.

 

Pakistan also repaid a $1.4 billion Eurobond that matured in April, helping re-establish a pricing benchmark in international debt markets after years of greater reliance on multilateral, bilateral and commercial financing.

 

The successful $3 billion issuance marks a significant expansion of Pakistan's access to international capital markets, while the strong order book and demand for the 10-year paper provide a market-based indication of improving investor sentiment toward the country's longer-term economic prospects.