By Staff Reporter
ISLAMABAD: Pakistan sold $500 million of three-year Eurobonds on Friday, its first return to the international capital markets in four years, a day after receiving $2 billion in fresh assistance from Saudi Arabia.
The issuance under the Global Medium-Term Note program was priced at an interest rate of 6.95%, with maturity in April 2029. It drew strong investor demand despite global economic volatility and geopolitical tensions, officials said.
Adviser to the Finance Minister Khurram Schehzad announced the deal on X, calling it a successful re-entry after a four-year absence at “attractive terms.” “The three-year Eurobond witnessed strong investor demand despite ongoing global market and geopolitical uncertainties — signalling renewed confidence in Pakistan’s economic outlook,” Schehzad wrote.
The transaction adds fresh liquidity to Pakistan’s sovereign yield curve, strengthens its presence in global bond markets and establishes a more efficient pricing benchmark for future deals, he said. It also reflects improving investor sentiment and marks a step toward diversifying funding sources while rebuilding a sustainable market presence.
Schehzad credited the Finance Division’s debt-management team for executing a “disciplined and forward-looking debt strategy.” The proceeds will support external financing needs and help reinforce foreign-exchange buffers, he added.
The timing aligns with a broader improvement in Pakistan’s fundamentals. Macroeconomic stability is taking hold, structural reforms are advancing and growth momentum is gradually strengthening, Schehzad noted. Easing energy prices and the opening of the Strait of Hormuz have further aided the country’s risk profile, he said, pointing to a “stable to positive economic outlook.”
The move comes 24 hours after Saudi Arabia announced it was increasing its overall support package to Pakistan from $5 billion to $8 billion, with the first additional $2 billion disbursement arriving immediately. It also follows Pakistan’s repayment last week of $1.4 billion in maturing Eurobond principal on April 8.
Speaking to reporters in Washington, Finance Minister Muhammad Aurangzeb described the Eurobond sale as “the culmination of a four-year journey” that shows the economy “going in the right direction.” “It is a huge vote of confidence in Pakistan’s leadership and the country’s economic direction,” Aurangzeb said. “It is a moment of happiness for us.”
Schehzad said Islamabad will press ahead with deeper engagement in global markets. Requests for proposals for financial advisers on the next phases of the GMTN and international Sukuk programs will be launched soon, while preparations for the Panda Bond issuance continue. The successful sale underscores Pakistan’s efforts to reduce reliance on short-term borrowing and build more resilient external accounts after years of tight liquidity. Officials view it as reinforcing credibility with international investors and paving the way for future fundraising on potentially better terms.
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