Pakistan raises PKR 557 billion via bonds as investor demand cuts yields

The Pakistan government raised PKR 557 billion ($1.99 billion) through the sale of Pakistan Investment Bonds (PIBs) in its latest auction, surpassing its target of PKR 300 billion.

Cut-off yields dropped between nine and 44 basis points.

The largest portion of the auction went to 15-year bonds, which drew PKR 288 billion at a yield of 12.70%.

Meanwhile, Pakistan sold PKR 130 billion in five-year bonds at 11.70%, marking a 44-basis-point decline. Two-year bonds fetched PKR 63 billion at 11.39%, down 40 basis points, while 10-year bonds raised PKR 38 billion at 12.49%, a nine-basis-point drop.

Three-year bonds brought in PKR 37 billion at 11.39%, down 29 basis points.

In the secondary market, yields on most bonds edged higher by four to 31 basis points, except for five-year bonds, which saw a slight one-basis-point dip.

According to Pakistan’s Economic Survey 2024-25, the country’s total public debt reached PKR 76.007 trillion by March, with domestic debt at PKR 51.518 trillion and external debt at PKR 24.489 trillion.

The government has prioritized long-term borrowing through PIBs and Sukuks, retiring PKR 2.4 trillion in treasury bills over the past nine months.

It also introduced a new two-year zero-coupon bond, raising PKR 610 billion, extending the average domestic debt maturity from 2.9 to 3.5 years.