Pakistan has launched its first Panda Bond in China’s onshore capital market, Adviser to the Finance Minister Khurram Schehzad announced.
“The inaugural Panda Bond is a three-year fixed-rate instrument, making it Pakistan’s first-ever RMB-denominated sovereign issuance in China’s onshore capital market,” Schehzad wrote on X on Thursday.
Denominated in Chinese Yuan (RMB), a Panda Bond is a bond issued by a foreign government or corporation in China’s domestic market, to raise funds directly from Chinese investors, diversify their financing sources and strengthen financial ties with Beijing. Pakistan’s inaugural issuance marks its first-ever entry into China’s onshore capital market.
The issuance of RMB 1.75 billion equivalent to $250 million drew investor demand of over RMB 8.8 billion, roughly $1.26 billion, resulting in an oversubscription of more than five times.
Schehzad noted that demand for the first tranche alone surpassed Pakistan’s entire planned Panda Bond programme size of RMB 7.2 billion, or $1 billion, adding: “Importantly, demand for the inaugural tranche alone exceeded Pakistan’s entire planned Panda Bond programme size of RMB 7.2bn (US$1 billion equivalent) a powerful reflection of growing international investor confidence in Pakistan’s economic outlook and reform trajectory”.
“The strong order book enabled highly competitive pricing (2.5 percent coupon), demonstrating the market’s positive assessment of Pakistan’s improving macroeconomic fundamentals, external stability, disciplined fiscal management, and sovereign repayment capacity,” he further stated.
On the broader significance of the move, Schehzad remarked that the issuance was more than a financing transaction as it marked Pakistan’s entry into China’s capital market and strengthened Pakistan-China financial cooperation.
“The success of the Panda Bond sends a powerful signal to global investors that Pakistan’s economic recovery is gaining international recognition. It reflects confidence in the country’s reform agenda, improving fiscal and external indicators, successful debt management, and commitment to sustainable growth,” he added.
“This milestone marks the beginning of a new chapter in Pakistan’s economic and financial engagement with the world,” Schehzad concluded.
The development came a day after Finance Minister Muhammad Aurangzeb travelled to China to attend the issuance ceremony.
The Panda Bond launch follows a string of recent financial moves by Islamabad including a $750 million Eurobond last month, $3 billion in deposits from Saudi Arabia, repayment of $3.4 billion to the UAE, and a $1.3 billion disbursement from the IMF after approval of EFF (Extended Fund Facility) and RSF (Resilience and Sustainability Facility) tranches.
