Pakistan receives interest from Chinese banks for Panda bonds

August 01, 2024 (MLN): In a significant development, Pakistan has garnered interest from five Chinese banks to issue Panda Bonds, according to Bloomberg.

This marks Pakistan's return to the international capital market after a long hiatus, following the recent approval of IMF funding.

Earlier this year, Finance Minister Muhammad Aurangzeb hinted regarding Panda bonds, saying he is keen to tap Chinese investors by selling as much as $300 million in Panda bonds for the first time this year.

Selling yuan-denominated debt will allow Pakistan to diversify its funding sources and reach investors in a new market.

It’s something “we should have looked at quite frankly some time back,” he said. China has the “second-largest and deepest bond market in the world” and it is the “right thing to do for the country” to tap the market, given Pakistan has already sold dollar and eurobonds, he said.

Aurangzeb said the initial Panda bond sale would be about $250m to $300m, which would be followed by further issuances.

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