Pakistan has increased the size of its Eurobond issuance to $750 million after exercising a “greenshoe option,” the country’s finance adviser said on Monday, with an additional $250 million placed with global institutional investors.
Pakistan last week raised $500 million through a three-year Eurobond that marked its return to international capital markets after a four-year gap, amid improving investor sentiment toward the country’s economy.
Khurram Schehzad, an adviser to Finance Minister Muhamad Aurangzeb, said Islamabad used the greenshoe option, which allows the issuer, such as a sovereign nation or corporation, to increase the size of a bond issuance beyond the initially planned amount in case of strong investor demand.
“The upsizing reflects stronger-than-expected investor demand, reinforcing confidence in Pakistan’s economic outlook and market re-entry,” Schehzad said on X.
“The 3-year Eurobond, initially placed at $500 million, attracted significant global interest – enabling the Government to broaden investor participation.”
Pakistan last tapped international bond markets in 2022 and has since relied on bilateral and multilateral financing, including support from the International Monetary Fund, to stabilize its economy.
The upsizing signals sustained investor appetite as well as enhanced depth and liquidity in Pakistan’s sovereign yield curve, according to Schehzad.
“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,” he said.
Finance Minister Muhammad Aurangzeb had described the development as the culmination of a four-year journey and signalled that Pakistan’s economy was going in the right direction. He further stressed that it was a “huge vote of confidence” in Pakistan’s leadership and the country’s economic direction. Informed sources said that the Eurobond offered a 6.975 per cent interest rate, maturing in April 2029.
The announcement came a day after Saudi Arabia said it was extending its support facility for Pakistan to $8bn from $5bn, with the first additional disbursement of $2bn.
On Saturday, Pakistan returned $2bn to the United Arab Emirates, which had sought the return of $3.5bn in funds part of external financing support extended in 2019 to help stabilise Pakistan’s balance of payments.
Earlier this month, Pakistan had also repaid $1.43bn in external debt, including a $1.3 billion Eurobond maturing on April 8.