The government of Pakistan has finalized a plan to raise $750 million through a combination of commercial financing and the issuance of Panda bonds. The initiative aims to meet upcoming external debt obligations and maintain financial stability.
Officials confirmed that the funds will be arranged through a consortium of banks. The proceeds are expected to cover Eurobond repayments, including a $500 million maturity due on September 30 and a $1 billion payment scheduled for April next year.
Finance Minister Muhammad Aurangzeb stated that Pakistan is actively pursuing the issuance of Panda bonds, which will be settled in Chinese yuan. The bonds are projected to raise between $200 million and $300 million in the first phase.
The issuance process is being structured with support from development partners, including the Asian Infrastructure Investment Bank (AIIB), which may provide credit guarantees to facilitate the deal. Officials highlighted that this approach diversifies Pakistan’s borrowing sources and reduces reliance on dollar-denominated debt.
By tapping into Panda bonds, Pakistan seeks stronger financial integration with China’s capital markets. The move is part of a broader strategy to ensure timely debt servicing, preserve external stability, and strengthen investor confidence in the country’s fiscal management.
Financial analysts note that this initiative could also positively influence Pakistan’s international credit rating. Raising funds through Panda bonds aligns with efforts to achieve a single ‘B’ rating, which may enhance access to global financial markets and attract long-term investment.
With the Panda bond plan, Pakistan aims to manage its external obligations efficiently while fostering closer financial ties with China, marking a significant step in its debt management and economic strategy.
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