ISLAMABAD: The Government of Pakistan is preparing to raise $750 million through a mix of commercial financing and the issuance of Panda Bonds, according to sources in the Finance Ministry, ARY News reported on Tuesday.

The funds are primarily aimed at meeting the country’s external debt obligations, particularly the repayment of upcoming Eurobond maturities. Officials confirmed that the financing will be managed through a consortium of leading banks.

Debt Servicing and External Obligations

Pakistan faces a $500 million Eurobond repayment due on September 30, followed by a $1 billion Eurobond maturity scheduled for April next year. To address these pressing obligations, the government is considering mobilizing funds through both commercial loans and Panda Bond issuance.

Sources noted that these measures are part of a broader strategy to ensure timely debt servicing and maintain financial stability in the external sector.

Panda Bonds in Chinese Yuan

Finance Minister Muhammad Aurangzeb previously highlighted that the Panda Bond would be settled in Chinese yuan, with the initial size expected to fall between $200 million and $300 million.

The issuance is being structured with support from development finance institutions, including the Asian Infrastructure Investment Bank (AIIB), which may extend credit guarantees to strengthen investor confidence.

Expanding Funding Sources

The launch of Panda Bonds is part of Pakistan’s long-term strategy to diversify its funding sources, reduce heavy reliance on dollar-denominated borrowing, and deepen financial ties with China’s capital markets.

Officials emphasized that this step also aligns with Pakistan’s goal of improving its sovereign credit rating to a single ‘B’ and enhancing access to alternative financing avenues in global debt markets.