Capital Market Developments in China
Capital Market Developments in China
Recent developments in the panda bond market by Qing Ren
Overview of panda bond market developments A panda bond is an RMB-denominated bond issued in China’s onshore market by overseas issuers. The first panda bond was issued in 2005 by international development institutions. In recent years,
the panda bond market has been booming with the openingup of China’s capital market and the internationalization of RMB, developing into a market with integrity, transparency and efficiency for high quality issuers. It offers not only a new financing option for overseas issuers, but also attractive RMB-denominated investment instruments for overseas investors. As of 28, February 2021, 73 overseas issuers have completed the registration (or approval) of RMB750 billion of panda bonds in China’s interbank bond market (CIBM), with a total issued amount of RMB308 billion and outstanding volume of RMB148 billion.
Panda Bond Issuance and Outstanding Volume in CIBM
There are four types of panda bond issuers: (1) overseas non-financial enterprises, such as Daimler AG, BMW AG, Veolia Environment Group, Air Liquide, and Trafigura Group; (2) overseas financial institutions, such as HSBC (HK), Standard Chartered Bank, National Bank of Canada and Wing Lung Bank; (3) foreign governmental agencies, such
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as Republic of Poland, Hungary, Republic of Korea and Province of British Columbia (Canada); and (4) international development institutions, such as Asian Development Bank (ADB) , International Finance Corporation (IFC), New Development Bank (NDB) and Asian Infrastructure Investment Bank (AIIB).
