• ADB and AIIB guarantees back the inaugural issue amid strong investor interest
• Proceeds to fund hospitals, telemetry system and power upgrades
ISLAMABAD: With some regulatory delays, the government on Friday hoped to launch and conclude inaugural $250 million equivalent Panda bonds in the Chinese capital market next month.
Finance Minister Muhammad Aurangzeb has repeatedly been announcing the first $250-300m batch issuance before the end of December this year, out of a $1bn targeted Panda bond programme.
“Final regulatory approvals from the relevant Chinese authorities are expected by early January, subject to which the inaugural issuance is planned to be launched and concluded in January,” an official statement said.
Informed sources said the initial delay was caused by guarantee approval process by the Beijing-based Asian Infrastructure Investment Bank (AIIB) that came later than anticipated.
Asian Development Bank (ADB) and AIIB would be backing the $250m (equivalent in renminbi) inaugural bond with about $285m guarantee. The funds so generated would be used to finance two major hospitals in Islamabad, a national telemetry system, and upgrades to the power distribution network.
Mr Aurangzeb presided over a meeting on Friday to review progress on Panda bond issuance, on the status of approvals, investor engagement, and regulatory processes. An official statement said the meeting was told that approvals from multilateral partners have been secured and that engagement with Chinese institutional investors had been constructive.
“Investor sentiment has been particularly strong and highly constructive, with broad-based interest and encouraging feedback from a diversified investor base in this competitive inaugural issuance,” the statement said, adding this reflected strengthening confidence in Pakistan’s macroeconomic stabilisation, an improved policy and reform framework, and a positive medium-term outlook.
The minister said Pakistan’s entry into the Chinese onshore bond market was part of a structured and programmatic financing strategy, aligned with prudent debt management objectives.
The Panda Bond programme is envisaged at approximately $1bn, with the inaugural tranche planned at an equivalent of $250m,” the statement said, adding that preparatory work for subsequent issuances under “Panda Series II” had already commenced, with Chinese regulatory authorities fully apprised of this phased approach.
The statement said the prevailing market conditions remained supportive, with broad-based investor interest and orderly market functioning. “Documentation and guarantees are in place, and engagement with financial institutions is progressing as planned”, it said.
The meeting was also informed that initial outreach has been undertaken with financial institutions for Panda Series II, with proposals expected around the closing of the inaugural issuance. Pricing will be determined closer to market engagement following completion of all regulatory requirements. The finance minister hoped the inaugural Panda Bond will further support Pakistan’s medium-term debt sustainability and diversification of funding sources.
While seeking approval to the ADB-AIIB guarantees in September, the finance ministry had also reported to the Central Development Working Party (CDWP) that the $250m Panda bonds were planned for launch in the Chinese Interbank Bond Market before December 2025 subject to internal and regulatory clearances in both countries.
The ADB will provide a guarantee of up to $160m, while the AIIB will cover $125m, to back the principal and unpaid interest obligations of the bonds, offering 95pc indemnity. These credit enhancements are required to secure a domestic AAA rating in China, enabling the bonds to qualify as investment-grade instruments.
Published in Dawn, December 20th, 2025
