KARACHI: Pakistan has raised $500 million through a three-year Eurobond, marking its return to international capital markets after a four-year gap, a government adviser said on Friday, in a sign of improving investor sentiment toward the country’s economy.
The issuance comes as Islamabad seeks to rebuild its presence in global debt markets following years of economic strain and external financing challenges, while positioning itself to diversify funding sources and strengthen its sovereign yield curve.
“Pakistan has successfully returned to the international capital markets after a four-year hiatus, with the issuance of a $500 million Eurobond today,” Khurram Schehzad, an adviser to the finance ministry, said in a post on X, adding the bond was issued at “attractive terms” under the government’s Global Medium-Term Note Program.
He said the bonds attracted strong investor demand despite ongoing global market volatility and geopolitical tensions.
The transaction is expected to add liquidity to Pakistan’s sovereign yield curve and support the development of pricing benchmarks for future debt issuances.
Pakistan last tapped international bond markets in 2022 and has since relied on bilateral and multilateral financing, including support from the International Monetary Fund, to stabilize its economy.
Schehzad said authorities were planning further engagement with global markets, including potential international sukuk and panda bond offerings.
Asked about the development, Adnan Sami Sheikh, vice president of research at Pakistan Kuwait Investment Company Ltd, said the three-year bond was priced at around 7 percent, reflecting relatively strong investor demand compared to Pakistan’s recent borrowing history, even as markets remained cautious.
He noted the yield was about 320 basis points above comparable US Treasury bonds, indicating improving short-term confidence supported by ongoing reforms and an IMF program, but lingering concerns about the country’s longer-term outlook.
“The real test will be whether Pakistan can now extend the curve beyond 5 years at similarly disciplined pricing,” he added.
