KARACHI: Pakistan issued its first yuan-denominated Panda Bond in China’s onshore capital market on Thursday, finance adviser Khurram Schehzad announced, raising 1.75 billion yuan ($250 million) at a 2.5 percent coupon.
Panda Bonds are yuan-denominated bonds issued by foreign governments or institutions. The launch marks Pakistan’s first entry into China’s domestic bond market, which is one of the world’s largest capital markets.
Pakistan, which relies heavily on bilateral and multilateral partners for loans to stabilize its economy, has described the Panda Bond issuance as a milestone in Pakistan’s efforts to diversify financing channels, strengthen investor confidence and expand its footprint in international financial markets.
“The landmark Panda Bond issuance of RMB 1.75 billion (equivalent to $250 million) attracted overwhelming investor demand of over RMB 8.8 billion (approximately $1.26 billion), resulting in an oversubscription of more than five times,” Schehzad wrote on X.
He said the demand for the inaugural tranche exceeded Pakistan’s entire planned Panda Bond program size of RMB 7.2 billion ($1 billion), adding that it reflected growing international investor confidence in the country’s economic outlook and reform trajectory.
Schehzad said the launch highlighted Pakistan’s entry into the Chinese capital market, diversification of the country’s investor base and a strengthening of the Pakistan-China financial cooperation.
The official said that the Panda Bond issuance shows Pakistan is transitioning from short-term financing pressures to long-term capital market access.
“This milestone marks the beginning of a new chapter in Pakistan’s economic and financial engagement with the world,” he concluded.
The launch ceremony at the Pakistani embassy in Beijing was attended by representatives from the Chinese government and financial institutions, international financial organizations, investors and banking sector stakeholders.
Pakistan’s Finance Minister Muhammad Aurangzeb, who attended the launch, will represent Pakistan’s economic outlook and investment opportunities during his visit to China and discuss future financial cooperation with Chinese counterparts, the finance ministry said on Wednesday.
