RMB-denominated sovereign bond attracts more than five times investor demand
Pakistan on Thursday issued its first-ever Panda Bond in China’s onshore capital market, marking the country’s debut sovereign RMB-denominated bond issuance, according to Khurram Schehzad.
In a post on X, Schehzad said the inaugural Panda Bond is a three-year fixed-rate instrument and represents Pakistan’s first sovereign issuance denominated in Chinese yuan within China’s domestic capital market.
The bond issuance raised RMB 1.75 billion, equivalent to around $250 million, and received investor demand exceeding RMB 8.8 billion, or approximately $1.26 billion, resulting in oversubscription of more than five times.
Panda Bonds are yuan-denominated bonds issued by foreign governments or institutions in China’s financial markets.
Schehzad said demand for the first tranche alone exceeded Pakistan’s total planned Panda Bond programme size of RMB 7.2 billion, equivalent to roughly $1 billion.
He described the strong investor response as a reflection of growing international confidence in Pakistan’s economic outlook and reform agenda.
“The strong order book enabled highly competitive pricing with a 2.5% coupon,” Schehzad said, adding that investors positively assessed Pakistan’s improving macroeconomic indicators, external stability, fiscal management, and sovereign repayment capacity.
According to the finance adviser, the issuance represents more than a financing transaction and marks a significant step in deepening Pakistan-China financial cooperation.
He said the successful issuance sent a positive signal to international investors regarding Pakistan’s economic recovery, fiscal reforms, debt management, and commitment to sustainable growth.
Schehzad added that the Panda Bond marked “the beginning of a new chapter” in Pakistan’s financial engagement with global markets.
Meanwhile, Muhammad Aurangzeb traveled to China on Wednesday to participate in the issuance ceremony of Pakistan’s inaugural Panda Bond in Beijing.