Pakistan Set to Re-enter Global Debt Markets After Four-Year Absence
Pakistan is gearing up for a significant return to international debt markets next year through the issuance of dollar-denominated Eurobonds, marking the end of a nearly five-year hiatus from global borrowing. This strategic move comes as part of the government's comprehensive plan to broaden its financing alternatives while capitalizing on growing investor trust in the country's economic recovery.
Government Confirms Eurobond and Panda Bond Plans
Khurram Shehzad, adviser to the finance minister, has officially confirmed the government's intention to issue Eurobonds in 2025, though specific details regarding the exact timing and size of the issuance remain undisclosed. In a parallel development, Shehzad reiterated Pakistan's commitment to issuing yuan-denominated Panda bonds later this year, demonstrating the administration's determination to explore multiple funding channels.
The country last accessed the Eurobond market in 2021, making this upcoming issuance particularly significant. The government's decision to re-enter international capital markets is widely perceived as an effort to reinforce Pakistan's financial stability and enhance the performance of its sovereign bonds, with backing from the International Monetary Fund (IMF).
Strong Bond Performance and Economic Upgrades
According to Bloomberg reports, Pakistan's dollar bonds have delivered an impressive 24 percent return this year, representing the strongest performance across Asia. This remarkable surge is attributed to improved investor sentiment and more favorable global financial conditions.
Global rating agencies have responded positively to Pakistan's economic progress. Both Fitch and Moody's have upgraded their outlooks on Pakistan's economy earlier this year, with Moody's elevating the country to Caa1 and Fitch lifting it to B-, both accompanied by stable outlooks. These upgrades have positioned Pakistan more favorably for a successful return to international capital markets.
Finance Minister Muhammad Aurangzeb had previously indicated that Pakistan aims to issue a Eurobond under its Global Medium-Term Note (GMTN) programme in 2026. This follows the successful repayment of a $500 million Eurobond in September 2025, which was originally issued with a 10-year maturity period.
Additional Financing Initiatives and Market Context
Beyond the Eurobond plans, Pakistan intends to raise $250 million through Panda bonds this year, further diversifying its international borrowing portfolio. The government has already secured substantial financing, obtaining $1 billion from Middle Eastern banks in June.
Pakistan's nearly three-year drought in commercial bond issuance stemmed from a combination of factors including a deteriorating credit rating and an impending balance-of-payments crisis. The current improved economic indicators and positive market response suggest the country is now better positioned to successfully navigate international capital markets once again.
