By Staff Reporter
ISLAMABAD: Pakistan completed its first-ever Panda bond issuance in China’s onshore capital market, raising CNY 1.75 billion ($250 million) in a deal that was oversubscribed and drew strong demand from Chinese investors.
Finance Minister Muhammad Aurangzeb called the transaction a “real landmark” for the country and the start of deeper financial ties with Beijing. The sale, completed on Thursday, marks the first time a South Asian sovereign has tapped the world’s second-largest bond market and opens a new long-term funding channel for Islamabad as it seeks to diversify away from traditional external borrowing.
Speaking on Friday at a ceremony at Pakistan’s embassy in Beijing, Aurangzeb said the debut issuance “marks a beginning of a new chapter in Pakistan’s economic and financial engagement with China, in the context of international capital markets.” He added that the transaction reflected “the growing maturity of our economic cooperation and the confidence of Chinese institutions and investors in Pakistan.”
The deal was the first tranche of a CNY 7.2 billion ($1 billion) Panda bond program that Pakistan established after two years of preparation involving Chinese regulators, development banks and financial advisers. The proceeds from the sustainable bond will finance projects in water, energy and health, underscoring the government’s focus on inclusive growth.
Aurangzeb described the offering as Pakistan’s first Sustainable Panda Bond and said it demonstrated “the Government’s commitment to inclusive and sustainable growth.” He noted that the issuance received an “overwhelmingly positive response” and was oversubscribed, signaling investor confidence in the country’s economic outlook and reform program.
China International Capital Corp. acted as lead underwriter, with Bank of China, Standard Chartered Bank and Hongta Securities as joint lead underwriters. Habib Bank Ltd. served as financial adviser. Credit enhancement guarantees from the Asian Infrastructure Investment Bank and the Asian Development Bank helped secure the transaction and broaden its appeal.
Aurangzeb thanked the Chinese authorities — including the Ministry of Finance, the People’s Bank of China and the National Association of Financial Market Institutional Investors — as well as the rating agency CCXI, law firm Fangda Partners and the Pakistani embassy team in Beijing for their support. He singled out the multilateral lenders for their role in making the debut possible. “Our goal was to establish Pakistan’s long-term presence in the Chinese capital market and to create a sustainable platform for future sovereign issues,” Aurangzeb said. He described the sale as “not the end, but the beginning of a long-term partnership between Pakistan and the Chinese capital market.”
The transaction comes as Pakistan’s economy shows signs of stabilization after years of external financing dependence. Aurangzeb pointed to stronger GDP growth, sharply lower inflation, rising foreign-exchange reserves, fiscal consolidation and a more stable external sector supported by resilient exports and steady remittance inflows.
The government is pushing ahead with tax reforms centered on digitalization and broadening the tax base, energy-sector changes aimed at resolving circular debt and improving efficiency, and state-owned enterprise restructuring that includes privatization. Investment climate improvements through regulatory simplification and targeted sectoral reforms are also under way. Aurangzeb reaffirmed Islamabad’s commitment to its International Monetary Fund program, saying adherence to the reform agenda had “strengthened macroeconomic foundations and reinforced market confidence in the country’s economy.”
Panda bonds are yuan-denominated securities issued by foreign governments or institutions in China’s domestic market. For Pakistan, the issuance represents both a diversification of funding sources and a symbolic deepening of financial cooperation with its largest bilateral creditor. Aurangzeb said Pakistan was “proud to become the first Panda Bond issuer from South Asia,” and expressed hope that the CNY 7.2 billion program would provide a reliable platform for future taps and further financial connectivity between the two countries.
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