Pakistan is gearing up to re-enter global debt markets, with plans to issue a dollar-denominated Eurobond in 2026 as part of its Global Medium-Term Note (GMTN) programme. This move marks the country’s first major Eurobond issuance in nearly five years, signaling a renewed push to diversify financing sources and attract international investment.
Khurram Schehzad, adviser to the finance minister, confirmed that Pakistan intends to re-enter the Eurobond market but did not provide specifics regarding the size, timing, or maturity of the planned issuance. The government is also pursuing Panda bonds this year, aiming to raise funds through yuan-denominated instruments and expand its investor base in China.
Finance Minister Muhammad Aurangzeb previously highlighted that Pakistan’s return to international capital markets under the GMTN programme is a key element of its broader strategy to stabilize the economy and secure competitive funding from global investors. The plan reflects efforts to build confidence in Pakistan’s sovereign debt through external support, including backing from the International Monetary Fund (IMF).
Pakistan recently completed the repayment of a $500 million Eurobond that matured in September 2025, originally issued in 2015 with a ten-year tenure. This timely repayment is seen as a critical step in reassuring investors and establishing credibility ahead of the upcoming Eurobond issuance.
Investor appetite for Pakistan’s debt has improved significantly, with the country’s dollar bonds posting strong performance this year. The positive trend is supported by easing global financial conditions and expectations of interest rate cuts by major central banks, which have opened opportunities for frontier economies like Pakistan to re-access international markets.
The government’s economic team has pointed to recent upgrades from major credit rating agencies, which have improved Pakistan’s outlook and validated its reform measures. These upgrades, combined with strengthened macroeconomic indicators, underpin the country’s strategy to tap international capital markets more effectively.
In addition to the Eurobond, Islamabad plans to raise approximately $250 million through Panda bonds this year. Earlier this year, Pakistan also secured $1 billion in financing from Middle Eastern banks after a gap of over two years, further diversifying its external funding sources and reducing reliance on domestic borrowing.
Re-entering the Eurobond market is expected to help Pakistan extend the maturity profile of its debt, lower funding costs, and enhance investor confidence. For international investors, the issuance presents an opportunity to participate in a frontier-market economy that is showing signs of stabilization and policy commitment.
Execution will require careful timing, favorable terms, and sustained reforms to maintain investor trust. Success in this venture could provide Pakistan with a more balanced financing portfolio, stronger global engagement, and the ability to navigate domestic economic challenges more effectively.
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