The Government of Pakistan has issued its first sovereign Panda Bond in China’s onshore renminbi bond market, raising RMB 1.75 billion, about USD 250–258 million. The three-year bond carries a 2.5 percent coupon and was more than five times oversubscribed, showing strong demand from institutional investors.
According to Finance Minister Muhammad Aurangzeb, the coupon is the lowest Pakistan has achieved on a sovereign bond. The deal also opens a new financing channel beyond Eurobonds and sukuk, helping Pakistan diversify both its funding base and currency mix.
Backed by partial credit guarantees from the Asian Infrastructure Investment Bank and the Asian Development Bank, the bond received a domestic AAA rating in China. Proceeds will support sustainable development projects, including water management, energy infrastructure and healthcare.
This is the first tranche of a broader RMB 7.2 billion Panda Bond program, with Pakistan expected to pursue further issuance.
At a time when dollar financing remains costly, Pakistan’s Panda Bond debut shows how renminbi financing can offer emerging economies a useful supplementary option.
