Pakistan raises record $3 billion in largest-ever single Eurobond issuance

Pakistan has raised $3 billion through a dual-tranche Eurobond sale, the largest single international bond issuance in the country’s history, the finance ministry said.

The transaction drew nearly $6 billion in orders from institutional investors across global markets, almost double the amount actually issued, according to the ministry. The bonds were split into a $1.75 billion tranche with a five-and-a-half-year maturity carrying a 7.5 per cent coupon, and a $1.25 billion tranche with a 10-year maturity carrying a 7.9 per cent coupon.

The sale marks the first issuance under Pakistan’s renewed Global Medium-Term Note (GMTN) programme, and follows the country’s inaugural Panda Bond, a bond denominated in Chinese yuan and sold to investors in China, as well as a series of sovereign credit-rating upgrades over the past three years.

The finance ministry said the borrowing was part of a broader debt-management strategy aimed at diversifying financing sources, extending the maturity profile of Pakistan’s external debt, and reducing refinancing risk, rather than simply raising additional funds. It noted that Pakistan has separately been retiring domestic debt ahead of maturity, and described the Eurobond issuance as an extension of that approach to external financing.

The transaction was managed by five joint bookrunners, Citi, Deutsche Bank, Emirates NBD, MUFG and Standard Chartered, with Pakistan’s Debt Management Office at the finance ministry overseeing the deal.

Pakistan’s return to international bond markets follows a period of financial distress in which the country’s access to global capital markets was severely constrained amid a balance-of-payments crisis. Since then, the country has secured a series of credit-rating upgrades from international agencies, which the finance ministry credited with helping restore investor confidence.

The ministry acknowledged that fiscal discipline, structural reforms, export competitiveness and productivity improvements remained ongoing challenges, but characterised the bond sale as evidence that Pakistan had moved from crisis and stabilisation toward renewed access to global capital.

FY27 budget allocated $2.82 for commercial and Eurobond financing

Following Budget 2026-27, Finance Minister Muhammad Aurangzeb had said that Pakistan plans to expand its access to international debt markets in the 2026-27 fiscal year, with the government preparing potential issuances of Panda bonds, Eurobonds, US dollar-denominated bonds and its first rupee-linked, dollar-settled bonds.

He said that the government has yet to determine the size of the planned issuances, while the FY27 budget has allocated $2.82 billion for commercial and Eurobond financing. Pakistan has also received approval to issue up to $1 billion equivalent in Panda bonds in China, following its debut $250 million Panda bond, which was largely backed by the Asian Development Bank and Asian Infrastructure Investment Bank.

Aurangzeb said Islamabad also wants to alter the composition of its external borrowing by relying more on commercial financing while keeping the overall level of external debt unchanged.

“Ideally what we want to do is to see if we can replace some of the bilateral through commercial,” he said. The proposed strategy follows Pakistan’s repayment of $3.4 billion in bilateral UAE deposits in May, alongside its use of financing from UAE commercial banks. Aurangzeb said the government’s objective was not to expand external liabilities but to diversify the country’s creditor base.

“We do not intend to increase the size of our external debt,” he said. The planned bond programme would give Pakistan additional options for raising funds from international capital markets while reducing reliance on some forms of bilateral financing. The finance minister’s comments come as Islamabad seeks to maintain fiscal stability and meet the financing requirements outlined in its FY27 budget.