Islamabad (TDI): Pakistan has made its first entry into China’s onshore debt market after issuing a $250 million Panda Bond, marking a significant step in its efforts to diversify funding sources.
Adviser to the Finance Minister Khurram Schehzad announced that the sovereign bond, worth RMB 1.75 billion (around $250 million), has been issued as a 3-year fixed-rate instrument. This is Pakistan’s first-ever RMB-denominated sovereign bond listed in China’s domestic capital market.
The development comes as Pakistan continues to tap international financial markets and external funding channels. Last month, the country raised $750 million through a Eurobond issuance. In parallel, Islamabad secured $3 billion in deposits from Saudi Arabia, repaid $3.4 billion to the United Arab Emirates, and also received $1.3 billion from the International Monetary Fund following approvals under EFF and RSF programs.
Read More: Aurangzeb Departs for Beijing for Pakistan’s First $250m Panda Bond Launch
According to Schehzad, investor demand for the Panda Bond was significantly strong, with total bids exceeding RMB 8.8 billion (about $1.26 billion). This level of interest resulted in more than five times oversubscription compared to the issue size.
He added that demand for just the initial tranche surpassed Pakistan’s planned overall Panda Bond program size of RMB 7.2 billion (roughly $1 billion), describing it as a sign of growing investor confidence in Pakistan’s economic direction and reforms.
The bond was priced at a competitive 2.5% coupon rate, which officials say reflects positive market sentiment regarding Pakistan’s macroeconomic outlook, external stability, fiscal discipline, and debt servicing capacity.
Finance Minister Muhammad Aurangzeb had travelled to China to attend the issuance ceremony of the country’s first Panda Bond, underscoring its importance in strengthening financial ties between Islamabad and Beijing.
Officials have described the issuance not just as a financing step but as Pakistan’s formal entry into China’s domestic capital markets. They say it opens a new channel for investment and deepens financial cooperation between the two countries.
Read More: Pakistan Plans to Issue Panda Bonds in Chinese Market
Schehzad said the strong response from investors sends a clear signal of international confidence in Pakistan’s economic recovery and reform agenda. He added that it reflects improving fiscal indicators, better external balances, and a commitment to long-term economic stability.
He termed the issuance a milestone that marks the beginning of a new phase in Pakistan’s engagement with global financial markets.
