ISLAMABAD (Kashmir English): Pakistan has made a historic breakthrough in global financial markets by issuing its first Panda bond in China’s onshore capital market.
This is the country’s first attempt to issue a government bond denominated in Yuan (RMB) and is being seen as an entry into the world’s second-largest and deepest investment market.
According to Advisor to the Finance Minister Khurram Shahzad, the bond will be at a 3-year fixed rate, marking Pakistan’s first yuan-denominated government bond in China’s onshore capital market.
The bond raised RMB 1.75 billion (approximately USD 250 million), but investor interest reached RMB 8.8 billion (approximately USD 1.26 billion), resulting in the bond being oversubscribed by more than 5 times.
Notably, the demand for the first tranche alone surpassed the total size of Pakistan’s planned Panda Bond program of RMB 7.2 billion (approximately US$1 billion), reflecting the growing confidence of international investors in the country’s economic recovery and reform efforts.
Furthermore, the bond was priced very competitively (2.5% coupon) due to the strong order book, reflecting the positive market assessment of Pakistan’s improving macroeconomic fundamentals, external stability, fiscal management, and government solvency.
