What are Panda Bonds? Pakistan to issue $300M worth of bonds to tap Chinese market

Pakistan Finance Minister Muhammad Aurangzeb has announced this week that the country will issue Panda Bonds worth $300 million in 2024 to tap the Chinese market, according to state media reports.

Aurangzeb said Panda bonds worth $250-300 million will be issued in the initial stage and the volume will be increased later, reported Radio Pakistan.

The minister added that the cash-strapped South Asian nation will go for an IMF programme with at least a three-year duration, expressing confidence that his country will grow better in the next financial year, said the report.

What are Panda Bonds?

Panda Bonds are onshore renminbi-denominated bond issued in People’s Republic of China by non-Chinese entities. Panda Bonds are issued as a capital-raising plaform for foreign countries or companies targeting Chinese investors.

However, the Panda Bond is different from the Dim Sum Bond, which are also renminbi-denominated bonds issued in Hong Kong targeting foreign investors who seek exposure to Chinese assets without restrictions from domestic authorities.