Pakistan borrowed $3 billion from global investors on Thursday. It is the largest bond sale the country has ever done in one go.
The government sold the bonds in two parts, called tranches. The first part raised $1.75 billion over five and a half years, at a 7.50% interest rate. The second part raised $1.25 billion over ten years, at a 7.90% rate.
Investors wanted in. The finance ministry said orders came in close to $6 billion, almost double what Pakistan actually sold. Buyers came from banks and funds across different countries.
The Bigger Picture
$3 billion is still less than half of Pakistan's $7.1 billion trade gap for just July and August this year. The country's foreign exchange reserves stood at $17 billion as of July, after Pakistan paid back a $1.3 billion loan to China.
Pakistan also sold a $500 million bond in April this year (its first international bond sale in four years) and raised about $250 million from a Panda bond in China in May. This week's $3 billion sale builds on both.
