Govt Targets $750 Million Funding via Panda Bond and Commercial Financing

Pakistan is preparing to raise about $750 million in the coming weeks through a mix of commercial borrowing and the launch of its first Panda bond, as the government seeks to shore up reserves before a major debt repayment and an International Monetary Fund review. According to a national daily, Islamabad is in talks with a consortium of global banks, including Deutsche Bank and Standard Chartered, to secure $300 million to $500 million in commercial financing. The move comes as the government prepares to repay $500 million on a Eurobond maturing on Sept. 30, 2025. At the same time, Pakistan is planning to issue its inaugural Panda bond worth $250 million in Chinese renminbi, likely in November. The bond, to be placed privately on China’s Interbank Bond Market, will be backed by guarantees from the Asian Development Bank and the Asian Infrastructure Investment Bank. Structured with a three-year maturity and a fixed-rate coupon, the deal is expected to carry a single-digit interest rate. The ADB and AIIB guarantees, covering up to 95% of the bond’s principal and interest, are designed to help Pakistan secure a domestic AAA rating in China despite its sub-investment-grade credit status. The guarantee cap stands at $285 million, split between $160 million from the ADB and $125 million from the AIIB. Habib Bank Limited and China International Capital Corporation are among the advisors coordinating the issuance. The fundraising efforts coincide with the arrival of an IMF mission in Karachi on Sept. 25 to meet officials from the State Bank of Pakistan, the Overseas Investors Chamber of Commerce & Industry, and the Pakistan Business Council. The talks are expected to assess Islamabad’s financing plans and reform commitments under the ongoing program. Prime Minister Shehbaz Sharif, meanwhile, chaired a high-level meeting via video link from London, urging his cabinet to finalize a roadmap to boost investment and trade. He stressed the potential of agriculture, IT, minerals, tourism, and renewable energy in attracting foreign capital, and directed ministries to accelerate ongoing projects while ensuring private sector participation.