Pakistan launches dual-tranche Eurobond offering

Pakistan has launched a new test of investor confidence with a proposed U.S. dollar Eurobond divided into five-year and 10-year tranches. The government has not yet announced the issue size, pricing or final yields, which will depend on market conditions and investor demand.

Khurram Schehzad, an adviser to the finance minister, described the transaction in a post on X as another step in Pakistan’s renewed access to international capital markets. He said the offering followed improvements in the country’s sovereign credit ratings and macroeconomic indicators, alongside growing engagement with international investors.

The move comes less than five months after Pakistan returned to the international bond market following a four-year absence. In April, the government initially raised $500 million through a three-year Eurobond under its Global Medium-Term Note Programme. Stronger-than-expected demand allowed it to increase the issue to $750 million through a $250 million green-shoe option. The bond matures in April 2029.

Pakistan also repaid a $1.4 billion Eurobond that matured in April. That repayment helped the government re-establish a pricing benchmark in international debt markets after years of relying heavily on multilateral, bilateral and commercial financing.

The proposed transaction would extend Pakistan’s maturity profile beyond the three-year bond issued in April. The five-year and 10-year tranches will test whether investors are willing to hold Pakistani sovereign debt for longer periods. S&P assigned a B rating to the medium-term note programme and proposed benchmark notes, while Fitch gave the programme a B- rating and a Recovery Rating of RR4, matching the country’s long-term sovereign rating.

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The proposed transaction was subject to market conditions and represented another step in Pakistan’s renewed access to international capital markets.