People walk on an overpass in Lujiazui, a financial zone in east China’s Shanghai, 3 November 2023. The 6th China International Import Expo (CIIE) will be held in Shanghai from November 5 to 10. a new development paradigm, a platform for high-level openness and a public good for the whole world. (Photo: Xinhua)
Issuance of panda bonds, or yuan-denominated bonds issued by foreign financial institutions in China, reached 66 billion yuan ($9.12 billion) as of April 14 this year, up 128.36 percent. over one year, according to data from financial information service Wind. ” showed, highlighting the attractiveness of China’s low-cost borrowing market for offshore issuers.
Last week, Deutsche Bank AG issued the largest series of panda bonds by a financial institution in six years. According to a statement on its website, the bank issued its third round of panda bonds on April 11, raising 3 billion yuan via 2-year senior preferred bonds. The transaction attracted an order book of more than 8 billion yuan, sparking strong investor demand and an attractive price relative to Deutsche Bank’s existing debt.
“The start of the year was positive for the panda bond market, with 61 billion yuan of issuance in the first three months. We continue to see strong interest from European and emerging market issuers looking to tap into the panda bond market. [Chinese] ” said Samuel Fischer, head of onshore debt capital markets at Deutsche Bank in China, quoted in the press release.
A total of 29 panda bonds have been issued as of April 14, according to Wind data, keeping the panda bond market hot since the beginning of 2023. In 2023, the issuance of panda bonds exceeded 150 billion yuan, reaching a record level.
Observers said panda bonds will continue to increase their appeal due to the differentiated interest rate environment at home and abroad, with a highly liquid domestic bond market and relatively low financing cost. In addition, the accelerated internationalization process and international trade status of the Chinese yuan have promoted the development of the Panda bond market, thanks to Chinese policies supporting the opening of financial markets.
The momentum behind the booming panda bond market is expected to continue this year, with the steady internalization of the yuan, the advantages of yuan financing as well as the improvement of relevant systems and mechanisms, said the observers.
Panda bond issuance is expected to increase steadily in the coming months. The issuers and investors of Panda Bonds will be further expanded through bond market optimization, observers noted.
World Time
