Pakistan's maiden Panda bond oversubscribed five times

RMB1.75b issuance at 2.5% coupon attracts $1.26b demand

KARACHI:

Pakistan has successfully completed its inaugural Panda Bond issuance in China's onshore capital market, marking the country's first?ever entry into the world's second?largest and deepest capital market, Advisor to the Finance Minister Khurram Schehzad announced on X on Thursday.

The three?year fixed?rate instrument of RMB1.75 billion (equivalent to $250 million) attracted overwhelming investor demand of more than RMB8.8 billion (about $1.26 billion), resulting in an oversubscription of more than five times. Demand for the inaugural tranche alone exceeded Pakistan's entire planned Panda Bond programme size of RMB7.2 billion ($1 billion equivalent), reflecting growing international investor confidence in Pakistan's economic outlook.

The strong order book enabled highly competitive pricing at a 2.5% coupon, demonstrating the market's positive assessment of Pakistan's improving macroeconomic fundamentals, external stability, disciplined fiscal management and sovereign repayment capacity.

Schehzad said the historic issuance represents far more than a financing transaction. It marks Pakistan's strategic entry into China's capital market, diversification of the investor base, strengthening of Pakistan?China financial cooperation, and the country's structured return to international capital markets from a position of improving stability and credibility.

The success of the Panda Bond sends a powerful signal that Pakistan's economic recovery is gaining international recognition, reflecting confidence in the reform agenda, improving fiscal and external indicators, successful debt management and commitment to sustainable growth. Pakistan is steadily transitioning from stabilisation to strategy, from crisis management to market confidence, and from short?term financing pressures to long?term capital market access, he added.