ISLAMABAD: Pakistan’s finance ministry said on Thursday that Islamabad has raised a record $3 billion through a landmark dual-tranche Eurobond sale, making it the largest global bond issuance by the country in a single transaction.

Pakistan’s Finance Minister Muhammad Aurangzeb said last week that Islamabad was looking to raise up to $2 billion through the Eurobond sale. The bond issuance reflects Pakistan’s attempts to diversify its external financing sources after relying on bilateral and multilateral creditors for years to shore up its foreign exchange reserves.

The finance ministry said the Eurobond sale attracted nearly $6 billion in orders, almost twice the amount raised, from a “broad and diversified base of institutional investors” across global markets.

“The successful transaction marks a major milestone in Pakistan’s renewed and increasingly diversified access to international capital markets, demonstrating strong investor confidence and Pakistan’s ability to access global funding markets at significant scale,” the ministry said.

It said Citi, Deutsche Bank, Emirates NBD, MUFG and Standard Chartered were the joint bookrunners in the transaction, crediting them with successfully managing and executing it.

Pakistan raised $3 billion through two Eurobond tranches comprising a $1.75 billion 5½-year bond with a 7.50 percent coupon, and a $1.25 billion 10-year bond with a 7.90 percent coupon, as per details shared by the finance ministry.

It added that the competitive pricing across both maturities, together with strong demand extending to the 10-year tenor, demonstrates Pakistan’s ability to mobilize “sizeable longer-term financing” as international investors reassess the country’s improving macroeconomic and credit fundamentals.

“Following the successful inaugural Panda Bond and improvements in Pakistan’s sovereign credit profile, this is the first issuance under Pakistan’s renewed strategic Global Medium-Term Note (GMTN) Programme — creating a platform for diversified access to international capital markets,” the ministry added.

The statement said that rather than just piling on debt, Pakistan is pursuing a broader strategy of diversifying financing sources, extending maturities, reducing refinancing and rollover risks, and creating opportunities to replace shorter-term and more expensive obligations with longer-duration, competitively priced financing.

The ministry noted that Pakistan has already pursued early retirement of domestic debt, adding that it aims to extend the same practice to external financing.

Pakistan raised $500 million through a three-year Eurobond in April this year, marking its return to international capital markets after a four-year gap. Pakistan last tapped international bond markets in 2022, but has since then relied on bilateral and multilateral financing, including frequent loan programs from the International Monetary Fund to stabilize its economy.

Pakistan issued its first yuan-denominated Panda Bond in China’s onshore capital market in May, raising ‌1.75 ​billion ‌yuan ($250 million) ⁠at ​a 2.5 percent ⁠coupon.