A Panda bond is a Chinese
renminbi-denominated
bond
Bond or bonds may refer to:
Common meanings
* Bond (finance), a type of debt security
* Bail bond, a commercial third-party guarantor of surety bonds in the United States
* Chemical bond, the attraction of atoms, ions or molecules to form chemica ...
from a non-Chinese issuer, sold in the
People's Republic of China
China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...
.
The first two Panda bonds were issued in October 2005 on the same day by the
International Finance Corporation
The International Finance Corporation (IFC) is an international financial institution that offers investment, advisory, and asset-management services to encourage private-sector development in less developed countries. The IFC is a member of ...
and the
Asian Development Bank
The Asian Development Bank (ADB) is a regional development bank established on 19 December 1966, which is headquartered in the Ortigas Center located in the city of Mandaluyong, Metro Manila, Philippines. The bank also maintains 31 field offic ...
. Their terms were 1.13 billion yuan of 10-year bonds at a 3.4% yield and 1 billion yuan of 10-year bonds at a 3.34% yield.
The
Chinese government
The Government of the People's Republic of China () is an authoritarian political system in the People's Republic of China under the exclusive political leadership of the Chinese Communist Party (CCP). It consists of legislative, executive, m ...
had been negotiating for several years about implementation details before permitting the sale of such bonds; they had been concerned about the possible effects on their
currency peg
A fixed exchange rate, often called a pegged exchange rate, is a type of exchange rate regime in which a currency's value is fixed or pegged by a monetary authority against the value of another currency, a basket of other currencies, or another m ...
. Eventually, it was agreed that funds raised from sales of Panda bonds would have to remain in China; issuers would not be permitted to
repatriate
Repatriation is the process of returning a thing or a person to its country of origin or citizenship. The term may refer to non-human entities, such as converting a foreign currency into the currency of one's own country, as well as to the pro ...
such funds.
In May 2010, rules were liberalised and more issuers were allowed, with the restriction on proceeds not being remitted abroad lifted.
In June 2016, Bank of China has signed a Memorandum of Understanding on panda bonds issuance with Poland's Ministry of Finance, making Poland the first European sovereign government to issue such bonds.
In March 2018, the Philippines issued its inaugural renminbi-denominated bonds or Panda bonds. The Philippines became the first Association of Southeast Asian Nations member to issue Panda bonds. The Treasury bureau of the Philippines has said that regulatory approvals are the only remaining for the issuance of three-year and five-year panda bonds — renminbi-denominated debt sold in China by a foreign issuer.
See also
*
Economy of China
The China, People's Republic of China has an upper middle income Developing country, developing Mixed economy, mixed socialist market economy that incorporates economic planning through Industrial policy, industrial policies and strategic Five- ...
*
Chinese financial system
The People's Republic of China has an upper middle income developing mixed socialist market economy that incorporates economic planning through industrial policies and strategic five-year plans.
—Xu, Chenggang. "The Fundamental Institution ...
*
Banking in China
China's banking sector had () in assets at the end of 2020. The "big four/five" state-owned commercial banks are the Bank of China, the China Construction Bank, the Industrial and Commercial Bank of China, and the Agricultural Bank of China, ...
*
List of foreign currency bonds Foreign currency bonds are bonds denominated in a currency that is foreign to the entity issuing the bonds.
List of foreign currency bonds
* Eurodollar bond, a U.S. dollar-denominated bond issued by a non- U.S. entity outside the U.S
* Baklava ...
References
External links
Panda bonds''Washington Post''
IFC Panda Bond Launch Opens Renminbi Market to International Institutions -- Bond Supports Capital Market Development, Local Currency Financing for Three CompaniesOctober 10, 2005
{{Economy of China
Bonds in foreign currencies
Finance in China
Belt and Road Initiative