Pakistan targets January launch of inaugural Panda bond issue

Pakistan is aiming to launch and conclude its inaugural Panda bond issuance in January, as part of a broader program of about $1 billion to diversify funding sources and support medium-term debt sustainability, the Finance Ministry has said.

Federal Minister for Finance and Revenue Muhammad Aurangzeb chaired a meeting at the Finance Division to review progress on the proposed issuance, which would mark Pakistan’s entry into China’s onshore bond market.

Officials from the ministry’s Debt Management Office and senior Finance Division officers briefed the minister on the status of approvals, investor engagement and regulatory processes. The meeting noted that approvals from multilateral partners have been secured and that engagement with Chinese institutional investors has been constructive.

According to the ministry, investor sentiment has been strong, with broad-based interest and encouraging feedback from a diversified investor base for what officials described as a competitive inaugural issuance. The ministry said this reflected strengthening confidence in Pakistan’s macroeconomic stabilization, an improved policy and reform framework and a positive medium-term outlook.

Final regulatory approvals from relevant Chinese authorities are expected by early January. Subject to those approvals, the inaugural issuance is planned to be launched and completed in January.

Aurangzeb said Pakistan’s move into the Chinese onshore bond market is being pursued as a structured and programmatic financing strategy aligned with prudent debt management objectives. The overall Panda bond program is envisaged at about $1 billion, with the first tranche planned at the equivalent of $250 million.

Preparatory work for subsequent issuances, referred to as “Panda Series II”, has already begun, with Chinese regulatory authorities informed of the phased approach, officials said.

Participants at the meeting said market conditions remain supportive, citing broad investor interest and orderly market functioning. They added that documentation and guarantees are in place and that engagement with financial institutions is progressing as planned.

The meeting was also told that initial outreach to financial institutions for Panda Series II has been undertaken, with proposals expected around the closing of the inaugural issuance. Pricing for the bonds will be determined closer to market engagement after completion of all regulatory requirements.

Concluding the meeting, Aurangzeb expressed satisfaction with the progress achieved and reaffirmed the government’s commitment to prudent, market-based financing. He said the inaugural Panda bond would support Pakistan’s medium-term debt sustainability and help diversify its sources of funding.