ISLAMABAD — Pakistan successfully issued $3 billion through a dual-tranche Eurobond transaction, its largest single international bond issuance on record. The offering attracted nearly $6 billion in orders—a 2x oversubscription—from institutional investors globally.
The transaction comprised two components: $1.75 billion at 7.50 percent with a 5.5-year maturity and $1.25 billion at 7.90 percent with a 10-year maturity. Demand for the longer tenor underscored appetite for extended duration exposure to Pakistan's sovereign debt.
The bond sale executes Pakistan's "Road to Market" strategy following recent credit rating upgrades and an inaugural Panda Bond issuance. It represents the first offering under Pakistan's renewed Global Medium-Term Note Programme, designed to create a diversified platform for international capital access.
Pakistan is pursuing active sovereign liability management rather than simple capital raising. The strategy targets three objectives: extending debt maturity profiles, diversifying financing sources and replacing shorter-term, higher-cost domestic obligations with longer-duration external financing. The country has already undertaken early retirement of domestic debt ahead of scheduled maturity.
The coupons of 7.50 percent and 7.90 percent reflect high-yield classification—what markets term junk bonds. This pricing indicates that while investor appetite has materially improved, perceived credit risk remains elevated relative to investment-grade sovereigns. The oversubscription demonstrates investors are pricing in the recent credit trajectory, not current risk levels.
Citi, Deutsche Bank, Emirates NBD, MUFG and Standard Chartered served as joint bookrunners on the transaction. Pakistan's Debt Management Office and Ministry of Finance coordinated execution.
