Finance minister Muhammad Aurangzeb reaffirmed Pakistan’s plans to return to the international bond market, saying both Eurobonds and Panda bonds are under consideration.

However, he said Eurobond issuance was contingent on a rating upgrade to Single B, which he is confident will occur in the fiscal year beginning next July.

Pakistan was upgraded to CCC+ by Fitch and Caa2 by Moody’s in July and August respectively, while S&P affirmed its CCC+ rating in July.

Aurangzeb told reporters at a Securities and Exchange Commission of Pakistan event that the country had held recent talks with the three major rating agencies in Washington.

“We are in positive discussions with international rating agencies, and we plan to enter in the Euro and US market in the next fiscal year, while we will try to launch Panda bonds during this fiscal year,” he said according to local media reports.

The minister earlier stated plans to raise US$300m-equivalent via a debut Panda bond issue, without giving a timeline.

A spokesperson for S&P declined to comment on the minister’s remarks. The agency's rating commentary in July affirmed Pakistan’s outlook as stable, implying no upgrade was under consideration.

Fitch and Moody’s also declined to comment. Moody’s outlook is positive, while Fitch does not assign outlooks to sovereigns rated below B–.

Pakistan last tapped the offshore bond market in January 2022.

State Bank of Pakistan cut its benchmark interest rate by 250bp to 15% earlier this week.

Source: IFR