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$500 Million Eurobond Repaid as Pakistan Meets Debt Obligation

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5 min read
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Legal Editorial Desk
$500 Million Eurobond Repaid as Pakistan Meets Debt Obligation
Pakistan has honored its $500 million Eurobond, which matured on September 30, 2025. This bond was originally issued in 2015 with a 10-year term and was settled in full. The development was confirmed by Khurram Shehzad, Adviser to the Finance Minister, who confirmed it through a post on X. This move demonstrates the government’s fiscal discipline at a time when Pakistan’s fundamentals are strengthening with external buffers and liquidity improving, and sovereign ratings have been raised (including Moody’s upgrade to Caa1). The investor confidence is also surging, with Pakistan’s bonds being quoted at a premium. Recently, GoP secured a $4.5 billion Islamic finance facility with domestic banks to tackle power sector debt and reduce fiscal pressure in line with IMF conditions. In July 2025, S&P Global upgraded Pakistan’s sovereign rating from CCC+ to B– with a stable outlook, citing improvements in finances and external buffers. Pakistan’s debt-to-GDP ratio has fallen from 77% in FY20 to 70% in FY25. The share of external debt in total public debt has decreased from 38% to 32%, which lowers vulnerability to foreign exchange shocks, while the growth of debt has slowed down significantly in FY25 compared to previous years. However, significant challenges lie ahead. Pakistan faces $25.9 billion in external debt payments in FY26. About $16 billion is expected to be rolled over, leaving $6 billion in principal and $4 billion in interest due. Eurobond repayment adds to the Government’s efforts to restore credibility, but maintaining this momentum will depend heavily on making substantial structural changes, improving revenue collection, and securing steady inflows from multilateral and bilateral sources.
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Authored and reviewed by the corporate law and tax litigation practice group at Javid Law Associates. Our team comprises High Court advocates, corporate legal advisors, and authorized tax practitioners across Pakistan.

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