Pakistan exercises the Green Shoe option to raise an additional $250 million, bringing the total issuance to $750 million.
Key Takeaways:
- Pakistan’s three-year Eurobond, initially placed at $500 million, has been upsized to $750 million following exercise of the Green Shoe option due to stronger-than-expected global investor demand.
- The issuance marks Pakistan’s first return to international bond markets in four years and was executed under the government’s newly launched Global Medium-Term Note (GMTN) Programme.
- The upsizing reinforces growing investor confidence in Pakistan’s economic recovery at a time when the country is navigating significant external financing pressures.
Karachi, Pakistan – Pakistan has upsized its debut Eurobond issuance to $750 million after stronger-than-expected demand from global institutional investors led to the successful exercise of the Green Shoe option, adding $250 million to the original placement of $500 million.
The development follows Pakistan’s return to international capital markets this week after a four-year absence, its first sovereign bond issuance since 2022. As The Nation reported, the three-year Eurobond was issued at attractive terms under Pakistan’s GMTN Programme, with Adviser to the Finance Minister Khurram Schehzad describing it as witnessing strong investor demand despite ongoing global market and geopolitical uncertainties, signalling renewed confidence in Pakistan’s economic outlook.
The Green Shoe option, a standard mechanism in bond markets that allows an issuer to sell additional securities when demand exceeds the original offering size, was exercised to place an extra $250 million with global institutional investors, bringing the total raised to $750 million. This upsizing is a market signal in its own right: it means investor appetite was large enough to absorb more paper than the government initially offered.
The issuance adds fresh liquidity to Pakistan’s sovereign yield curve and broadens its investor base at a critical moment. The country recently repaid a $1.3 billion Eurobond that matured in April 2026, repaying on schedule what Finance Minister Muhammad Aurangzeb described as a “non-event” — a deliberate signal of the government’s commitment to meeting external obligations on time. The new $750 million raised goes directly toward supporting foreign exchange reserves and easing pressure from upcoming external repayments, including a $3.5 billion facility owed to the UAE.
The Eurobond issuance is part of a broader external financing strategy that also includes a first-ever Panda Bond issuance in China’s yuan market, potential Sukuk offerings, and active engagement with multilateral institutions under the $7 billion IMF programme.
