Panda Bond Market Heats Up as Issuance Nearly Reaches 6.4 Billion Yuan This Year, Doubling Year-over-Year

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Reporter Han Yu

On March 17, BNP Paribas in France will issue its first RMB bond of 2026 (Bond Connect) in the National Interbank Bond Market, with a maximum issuance amount of 5 billion RMB. Industry insiders say this marks another top European financial institution joining the ranks of panda bond issuers.

This year, panda bonds have seen a hot start. According to Wind data, as of March 15, the issuance scale of panda bonds in 2023 has reached 63.935 billion RMB, a year-on-year increase of 108%.

Ming Ming, Chief Economist at CITIC Securities, stated that the main reasons for the hot panda bond issuance this year include the China-U.S. interest rate differential advantage, the Federal Reserve maintaining high interest rates while China continues to implement moderately loose monetary policy, and the significantly lower financing costs of RMB compared to USD. At the same time, RMB internationalization is steadily advancing, and international investors’ demand for RMB assets is rising.

Song Xiangqing, Vice President of the China Business Economics Society, said that with the enhancement of RMB cross-border settlement and international reserve status, multinational companies have strong RMB financing and currency matching needs. Coupled with the enthusiasm of domestic and foreign investors for RMB assets, the expansion of innovative products like green panda bonds has also contributed to a significant increase in panda bond issuance.

Along with the substantial expansion of scale, recent panda bond issuances have also been noteworthy.

For example, on March 11, Bank of China, as the lead underwriter and bookrunner, helped Hong Kong-funded China Power (China) Co., Ltd. successfully issue 1 billion RMB of 3-year green panda bonds. This was also the first non-financial enterprise green panda bond issued under a green bond framework. Additionally, the Asian Infrastructure Investment Bank (AIIB) recently successfully issued 3 billion RMB of 3-year panda bonds, with 34 investors participating and a total order amount of 9 billion RMB, both hitting record highs.

Furthermore, on March 6, Deutsche Bank announced that it successfully priced and issued 5.5 billion RMB of multi-tenor panda bonds in the interbank bond market. This is the first panda bond issued by a EU financial institution in 2026 and also broke the record for the largest single foreign bank panda bond issuance. The issuance attracted a total of 8.66 billion RMB in orders, with 3-year and 5-year tranches oversubscribed by 1.55 times and 1.63 times respectively. Ju Tong, General Manager of Deutsche Bank China, said this reflects investors’ high recognition of Deutsche Bank’s credit strength and long-term strategy, as well as the increasing attractiveness of the RMB bond market to diversified investors.

Song Xiangqing predicts that this year, the panda bond market will continue to be supported by policies, costs, refinancing, internationalization, and product innovation. The advantage of lower financing costs is expected to persist, with a stable domestic liquidity environment benefiting low-cost foreign institutional financing. Meanwhile, the rising maturity of panda bonds within the year will create rigid refinancing needs, providing a market resilience foundation. Additionally, continuous innovation in green and thematic bonds, along with the advancement of RMB internationalization, will jointly sustain high market activity and high-quality expansion.

Ming Ming stated that the supporting factors for the panda bond market this year include: first, an expansion of issuers, with more international multilateral institutions, sovereign wealth funds, and multinational corporations expected to join; second, accelerated product innovation, with growth in ESG products like green panda bonds aligning with global sustainable investment trends; and third, an expanding investor base, with increased participation from foreign institutions.

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Editor: Gao Jia