Pakistan is looking to raise yuan-denominated bonds in China’s onshore market, in what would mark its debut panda bond issuance, with a size of as much as 1.75 billion yuan ($257 million), according to Bloomberg.
The three-year sustainable development bonds could be priced as soon as next week, according to people familiar with the matter, who asked not to be identified discussing private matters. The Asian Infrastructure Investment Bank and Asian Development Bank would together guarantee 95 per cent of the bond, the people said. Details are still under discussion and could change.
Issuance of yuan-denominated bonds by offshore borrowers in China’s onshore market has continued to rise, underscoring the appeal of Chinese assets as a relative safe haven for investors during tensions in the Middle East.
Driven by lower funding costs and the internationalization of the yuan, Bloomberg data showed that China’s panda bond issuance totalled a record 84.2 billion yuan in the first quarter, double the level from a year ago. Indonesia’s finance minister has also signalled plans to issue panda bonds.Yields on Chinese government bonds have remained broadly stable since the Iran war started. The 10-year yield was little changed at 1.757 per cent on Friday.
