Pakistan raises $3b in largest-ever international bond transaction

Pakistan raised $3 billion in a two-part Eurobond sale, which the Ministry of Finance on Thursday described as the biggest international bond deal the country has done in a single go. Orders from global investors totalled about $6 billion, close to double the sum placed, drawn from institutional buyers in several regions.

The larger share was a $1.75 billion tranche of 5½-year notes carrying a 7.50 per cent coupon, while $1.25 billion came from a 10-year issue at 7.90 per cent. The ministry tied the competitive pricing and strong demand at the longer tenor to Pakistan's capacity to mobilise sizeable long-term financing. It framed the deal as part of a wider approach to managing sovereign liabilities, aimed at extending maturities and reducing refinancing risk.

Finance Minister Muhammad Aurangzeb, speaking at an ADB-organised taxation dialogue in Islamabad, pointed to three sovereign rating upgrades in the period beginning April of the previous year. He also said the fiscal deficit had reached its lowest level in 22 years. According to Radio Pakistan, he added that Sukuks, instruments denominated in rupees but settled in dollars, and Panda Bonds were under consideration to repay costlier short-term debt.