In a significant shift for Pakistan’s financial standing in global capital markets, three of the country’s Eurobonds are now trading above par, each priced over $1 a unit. This marks the first time in years that Pakistan’s sovereign bonds have achieved such pricing levels, indicating a notable rebound in investor confidence toward the country’s economic outlook and debt sustainability.
The announcement was made by State Bank of Pakistan (SBP) Governor Jameel Ahmad during the central bank’s monetary policy press briefing this week. He confirmed that Pakistan’s Eurobonds, which had been trading at deep discounts as recently as 2023, are now seeing positive movement, largely in response to improved macroeconomic indicators and successful international debt servicing.
Governor Ahmad pointed to the two Eurobonds maturing in September 2025 and April 2026, both of which had previously been trading at nearly one-third of their face value—hovering around 37 to 38 cents last year. As of the latest trading session, those same bonds are now priced at 100.28 cents and 100.05 cents, respectively. A third Eurobond maturing in January 2029 also closed at 100.74 cents, according to data provided by Arif Habib Limited’s Head of Research, Sana Tawfik.
Pakistan currently has six Eurobonds in circulation, totaling $6.8 billion in outstanding value, with maturities extending from 2025 through 2051. The shift from distressed levels to premium pricing comes in the wake of two international credit rating agencies upgrading Pakistan’s sovereign rating to ‘B-‘ from ‘CCC+’, accompanied by a stable outlook. The rating improvement has been instrumental in reviving investor sentiment and signaling reduced default risk.
Governor Ahmad attributed this turnaround to several stabilizing factors, including Pakistan’s consistent repayment of foreign loans and interest obligations. He highlighted the central bank’s success in raising the country’s foreign exchange reserves to $14.5 billion in FY25, compared to $9.4 billion in FY24. Additionally, the rupee-dollar exchange rate has stabilized, and workers’ remittances reached a record $38.3 billion in FY25—up significantly from $32.3 billion in the prior year.
The central bank also disclosed that $1.8 billion will be repaid in FY25–26 against maturing Eurobonds, with expectations that the current market confidence and improved ratings may support future fundraising through fresh international bond issuances.
Looking further ahead, Pakistan is scheduled to repay $25.9 billion in FY26, including anticipated rollovers of $16 billion. The remaining net repayment of $10 billion consists of $3.75 billion in commercial loans and around $4 billion in interest payments.
Despite this repayment schedule, the country’s external debt has remained stable at approximately $100 billion over the past three years. This suggests that new borrowings have been primarily used to meet maturing obligations rather than expanding the debt stock—a marked contrast to the previous seven years, where external debt grew by an average of $6 billion annually.
The current Eurobond performance is being viewed as a sign of Pakistan’s improving position in the eyes of global investors, potentially opening the door to more favorable terms for future borrowing and deeper participation in sovereign debt markets.