Karachi: Pakistan has successfully secured financing from China’s bond market. Pakistan now has access to Chinese capital markets alongside Western markets for raising debt.
Adviser to the Finance Ministry, Khurram Schehzad, said that with the successful issuance of Pakistan’s first-ever Panda Bond in China’s capital market, the country has formally entered the world’s second-largest and deepest capital market.
Pakistan has issued Panda Bonds worth RMB 1.75 billion, equivalent to $250 million. The issuance received an overwhelming response from Chinese investors. During the auction, Chinese investors submitted bids worth RMB 8.8 billion, or approximately $1.26 billion, to purchase Pakistan’s Panda Bonds — more than five times the amount Pakistan initially sought to raise. As a result, Pakistan’s debut auction in China’s Panda Bond market was heavily oversubscribed.
Khurram Schehzad said the bond secured a highly competitive coupon rate of 2.5 percent.
He further noted that it was remarkable that the bids received in the first auction alone exceeded Pakistan’s entire planned Panda Bond issuance programme. Pakistan plans to raise RMB 7.2 billion from the Chinese bond market, equivalent to nearly $1 billion.
The success of the Panda Bond issuance is being viewed as a historic vote of confidence by global investors in Pakistan’s economic recovery, reform agenda, and return to international capital markets.
