By Staff Reporter
ISLAMABAD: Pakistan expanded its latest Eurobond offering to $750 million from an initial $500 million by exercising the greenshoe option, the government said on Monday, as robust investor demand allowed it to tap additional funds at the same terms.
The upsizing comes as the country faces rising foreign-exchange pressures from a higher oil-import bill linked to the conflict in the Middle East. It marks the latest sign of improving access to international capital markets after a four-year absence. “Following its successful return to international capital markets after four years, Pakistan has upsized its Eurobond issuance to $750 million, with an additional $250 million placed with global institutional investors through the exercise of the green shoe option,” the Ministry of Finance said in a statement.
Khurram Schehzad, adviser to Finance Minister Muhammad Aurangzeb called it a reflection of “stronger-than-expected investor demand, reinforcing confidence in Pakistan’s economic outlook and market re-entry.” The original $500 million three-year note, he said in a post on X, drew significant global interest that enabled the government to broaden the investor base.
The move also signals “strong investor demand and sustained appetite,” Schehzad added, while enhancing depth and liquidity in Pakistan’s sovereign yield curve and underscoring the country’s re-engagement with global capital markets. “Driven by incremental investor demand, the upsizing enhances Pakistan’s presence in global capital markets — reinforcing confidence in the country’s economic outlook and market re-entry, while building momentum for future issuances under the Global Medium-Term Note (GMTN) programme.”
The initial $500 million placement last week was Pakistan’s first Eurobond since 2022. People familiar with the matter said the three-year note was priced to yield 6.975% and matures in April 2029.
Aurangzeb described the debut issuance as the culmination of a four-year effort to restore market access and a “huge vote of confidence” in the country’s leadership and economic direction. The announcement arrived a day after Saudi Arabia agreed to extend its support facility for Pakistan to $8 billion from $5 billion, including an immediate additional disbursement of $2 billion. On Saturday, Pakistan repaid $2 billion to the United Arab Emirates, which had asked for the return of $3.5 billion in funds originally extended in 2019 to help stabilize the balance of payments.
Earlier this month, the government repaid $1.43 billion in external debt, including a $1.3 billion Eurobond that matured on April 8. Pakistan has relied on bilateral and multilateral support — including from the International Monetary Fund — since its last bond market visit in 2022. The successful return and subsequent upsizing reflect a gradual improvement in investor sentiment toward the economy, even as the country continues to manage tight foreign-currency liquidity. The greenshoe option, a standard over-allotment clause in bond deals, gives issuers the flexibility to increase the size of an offering when demand outstrips the initial target, allowing them to raise extra funds without reopening the books or changing pricing.
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