Pakistan returned to the international capital markets on Friday after a four-year hiatus, raising $500 million through a Eurobond issuance. The transaction was executed under the government’s Global Medium-Term Note (GMTN) Program.
According to Khurram Schehzad, Advisor to the Finance Minister, the three-year bond reached maturity with an interest rate of 6.95%, set to expire in April 2029.
This market re-entry follows the recent repayment of a $1.4 billion Eurobond on April 8. It coincides with a $2 billion disbursement from Saudi Arabia as part of an expanded $8 billion support package.
Advisor to the Finance Minister Khurram Schehzad announced the development on Friday via his official X account, stating: “Pakistan has successfully returned to the international capital markets after a four-year hiatus, with the issuance of a $500m Eurobond today, at attractive terms under its GMTN Program.”
The issuance, structured as a three-year Eurobond, reportedly carries an interest rate of approximately 6.95 percent and is set to mature in April 2029. According to officials, the bond attracted strong investor demand despite prevailing global market volatility and geopolitical uncertainty.
Schehzad emphasized this point, noting: “The three-year Eurobond witnessed strong investor demand despite ongoing global market and geopolitical uncertainties – signaling renewed confidence in Pakistan’s economic outlook.”
Boost to Sovereign Yield Curve and Market Position
The successful issuance is expected to enhance Pakistan’s financial positioning in global markets. Schehzad highlighted that the move would contribute to strengthening the country’s sovereign yield curve.
“This well-timed issuance adds fresh liquidity to Pakistan’s sovereign yield curve, strengthening its presence in global bond markets and supporting the development of a more efficient pricing benchmark for future transactions,” he said.
He further described the development as a critical step toward rebuilding Pakistan’s credibility in international financial markets, adding that it reflects improving investor sentiment and supports efforts to diversify funding sources.
“The transaction reflects improving investor sentiment and marks an important step in Pakistan’s strategy to diversify funding sources and rebuild a sustainable market presence,” Schehzad stated.
Backdrop of Financial Support and Debt Management
The Eurobond issuance comes shortly after Pakistan secured $2 billion in financial assistance from Saudi Arabia, part of an expanded support package increased from $5 billion to $8 billion.
The government has also demonstrated its commitment to debt obligations, having repaid $1.4 billion earlier this month against a maturing Eurobond on April 8. Officials say these developments collectively signal improved fiscal discipline and credibility.
Schehzad acknowledged the role of the Finance Division in achieving this milestone, stating:
“This milestone underscores the continued efforts of the Finance Division, particularly the debt management team, in executing a disciplined and forward-looking debt strategy.”
Government Sees “Vote of Confidence”
Speaking from Washington, Finance Minister Muhammad Aurangzeb described the successful issuance as a turning point.
He said the development was the “culmination of a four-year journey” and added that it showed Pakistan’s economy was “going in the right direction.”
Aurangzeb further emphasized its broader significance, calling it a “huge vote of confidence” in the country’s leadership and economic policies. “It is a moment of happiness for us,” he remarked.