Latest news with #PandaBonds
Zawya
21-05-2025
- Business
- Zawya
AfDB to back Egypt's upcoming sustainable Samurai Bonds issue with $400mln PCG
Arab Finance: The African Development Bank (AfDB) is planning to provide a partial credit guarantee (PCG) worth $400 million, or its equivalent in Japanese yen, to support Egypt's upcoming issuance of sustainable Samurai bonds, Abdourahmane Diaw, the bank's Country Manager for Egypt, told Al Arabiya Business. The guarantee proposal is expected to be presented to the AfDB Board of Directors in September 2025, Diaw highlighted. He also stated that the proposed guarantee would support the Egyptian government to issue sustainable Samurai bonds worth up to $500 million, which will be offered in the Japanese market. This move reflects the bank's ongoing commitment to support innovative green finance instruments, Diaw said. In May 2023, the AfDB approved a $330 million PCG for Egypt's debut sustainable Panda bonds, which were issued in China's financial markets. For 2025, the AfDB has allocated a total of $746 million in funding to Egypt, Diaw noted, adding that this sum covers both sovereign and non-sovereign operations, including support for four key strategic projects. According to Diaw, the AfDB's current portfolio in Egypt amounts to approximately $2.045 billion, spanning sovereign and non-sovereign projects. © 2020-2023 Arab Finance For Information Technology. All Rights Reserved. Provided by SyndiGate Media Inc. (
Business Recorder
23-04-2025
- Business
- Business Recorder
Aurangzeb highlights Panda, ESG bonds in key meetings at Washington: Finance Division
Finance Minister Muhammad Aurangzeb expressed Pakistan's interest in returning to the financial markets, including the issuance of Panda and ESG bonds, in key meetings with the delegations of Deutsche Bank and Moody's at Washington, a statement from the Finance Division said. The meetings were held on the sidelines of the 2025 Spring Meetings of the IMF and the World Bank Group. In meeting with the Deutsche Bank team led by Myriam Ouazzani, Managing Director for the MENA region, Aurangzeb 'expressed Pakistan's interest in returning to the financial markets, including the issuance of Panda and ESG (environmental, social, and governance) bonds, supported by the country's macroeconomic stabilisation and recent credit ratings upgrade', the statement said. Panda Bonds are yuan-denominated debt instruments issued by foreign entities in China's onshore market. They provide an alternative financing mechanism for governments and corporations seeking to tap into China's vast liquidity while also supporting the internationalization of the Chinese yuan (RMB). ESG bonds are fixed-income securities issued to raise capital for projects that align with the principles of environmental, social, and governance criteria. These bonds allow issuers to finance initiatives that have positive impacts in areas such as renewable energy, social equality, and corporate governance. For investors, ESG bonds offer a way to contribute to responsible investment strategies while generating returns from their investments, according to the information available on Nasdaq website. In his meeting with Moody's commercial team in Washington, D.C Aurangzeb briefed the team on 'Pakistan's macroeconomic outlook, highlighting fiscal and current account surpluses, reduced inflation, a stable foreign exchange rate, and improved reserves', the Finance Division said. 'He also provided an update on the issue of the Panda Bond and agreed to continue discussions on possible collaboration in the future.' In January this year, Aurangzeb said Pakistan would raise around $200 million to $250 million from Chinese investors through Panda Bonds. Later in March, the finance czar said Pakistan was preparing to issue its first-ever Panda Bond in the Chinese market this calendar year (2025). 'I have been advocating, and I am very keen, that Pakistan—taking advantage of the second-largest and deepest capital market in the world—goes for an inaugural Panda bond,' the minister said in an interview with China Global Television Network (CGTN) then.
Express Tribune
27-03-2025
- Business
- Express Tribune
FM unveils plan to raise $200m via Panda bonds in China
Finance Minister Senator Mohammad Aurangzeb during an interview with VOA. SCREENGRAB Listen to article Finance Minister Muhammad Aurangzeb hinted that Pakistan may issue Panda Bonds in Yuan this year to tap into China's extensive capital market. Speaking in an interview with China's CGTN during the Boao Forum for Asia, Aurangzeb said Pakistan was ready to engage the Chinese interbank bond market after previously issuing debt only in Western markets. 'I have been advocating and I am very keen that Pakistan… go for an inaugural Panda bond,' he said. 'We are very hopeful that during this calendar year, we will do that.' Panda bonds are yuan-denominated debt instruments issued by foreign entities in China. They offer an opportunity to attract investment from Chinese financial institutions including banks, asset managers and insurers. Aurangzeb noted that while Pakistan had experience with issuing dollar and euro bonds, this would mark its first entry into the Chinese debt market. The move is part of a broader effort to diversify funding sources and reduce reliance on Western markets. The government is seeking to bolster its foreign exchange reserves and stabilise its economy after recovering from a prolonged economic crisis that nearly pushed the country into sovereign default two years ago. In January, the finance minister said the Panda bond issue would target around $200 million. His announcement comes after major credit agencies upgraded Pakistan's sovereign ratings, enhancing the country's prospects of returning to global bond markets. The finance chief added that Pakistan was leveraging its improved macroeconomic indicators and looking to build deeper financial ties with Beijing.
Express Tribune
26-03-2025
- Business
- Express Tribune
Pakistan hints at Panda Bonds this year
Finance Minister Senator Muhammad Aurangzeb on Wednesday hinted at the possibility of Pakistan issuing Panda Bonds in Yuan this year to access China's vast and deep capital market. In an interview with Chinese media outlets, including CGTN English and China Daily, the minister said, Pakistan has previously issued bonds in the US dollar and the euro, and now is the time to benefit from the Chinese capital market. The issuance of Panda Bonds will connect Pakistan's capital markets with China and reflect China's important role in Pakistan's digital transformation, he said.
Express Tribune
01-03-2025
- Business
- Express Tribune
Govt reduces debt rollover risk
Listen to article Pakistan has met the International Monetary Fund (IMF) condition of increasing the maturity profile of its debt through retiring the short-term borrowing and the government also hopes to strike a $1 billion foreign commercial loan deal in April. The development came hot on the heels of some improvement in debt indicators, including the expected slowdown in the pace of debt accumulation to single digits after a long time. The debt office, which now directly reports to the finance secretary, has taken certain initiatives to reduce interest rate and debt refinancing risks. Against the IMF's condition of increasing the current average maturity time of debt from two years and eight months, the Finance Division managed to increase it to three years and three months by December, according to data compiled for the IMF review starting from Monday. The first formal programme review talks between Pakistan and the IMF will begin on March 3 and will continue till March 14. Their successful conclusion will lead to the release of the second loan tranche of about $1.1 billion. Pakistan's performance in terms of debt maturity is much better than the end-June 2025 target set by the IMF. This has reduced both refinancing and interest rate risks and will also lessen the government's dependence on commercial banks. The average time to maturity is the weighted average repayment period of the existing debt. The IMF has been pointing to increasing the maturity period to address the risk of rollover. The maturity target has been achieved by shifting the composition of domestic debt, which stands at Rs49 trillion, to longer-term Pakistan Investment Bonds (PIBs) while reducing reliance on short-term treasury bills (T-bills), said Eraj Hashmi, Director of Debt Office. He said that the deliberate move not only mitigated rollover risks but also attracted investors, who were seeking stable, long-term returns, reinforcing confidence in Pakistan's debt management strategy. The finance ministry is also trying to secure a $1 billion foreign commercial loan on the back of a $500 million credit guarantee being given by the Asian Development Bank (ADB). Pakistan has not been able to get a new foreign commercial loan due to its poor rating. As a solution, it will use the ADB guarantee. Sources said that London-based commercial banks had shown interest and the terms were being finalised. Among these are Standard Chartered and Deutsche Bank. One Chinese bank has also shown interest. The government has also been trying to raise debt from Chinese markets but it is a lengthy process and now it hopes to raise up to $250 million by next year. Internal assessment shows that Panda Bonds will attract around 3.5% interest rate, which is far lower than up to 8.5% rates for issuing Eurobonds. The Finance Division has managed to restrict debt accumulation to single digits, helped partially by the reduction in interest rate. In the last fiscal year, there was an increase of Rs8.4 trillion in the debt stock, showing a surge of 13.3%. The Finance Division's assessment is that the debt accumulation will slow down to less than 9% in this fiscal year and the net increase will not be more than Rs6.3 trillion. It sees the public debt growing to Rs77.5 trillion by June this year. During the first half of the current fiscal year, Rs2.8 trillion had been added to the debt stock at a pace of 3.9%. The finance ministry said that it would continue implementing the debt buyback policy and next week it would buy back PIBs. Earlier, it had bought Rs1 trillion worth of T-bills, which resulted in savings of Rs31 billion in interest cost, according to the ministry. This will continue in the second half of this fiscal year through buying back bonds instead of T-bills. The ministry said that in the first six months of the current financial year, it retired Rs1.7 trillion worth of debt, reducing reliance on commercial banks. The reason was the upfront payment of Rs2.5 trillion in profit by the central bank. As a result, the T-bills portfolio decreased Rs1.5 trillion, which will positively impact next year's gross financing needs. In June last year, banks held 81% of government securities. Now, their holdings stood at 67%. The finance ministry said that the government had contained external debt since Prime Minister Shehbaz Sharif took office in March last year. Total external debt remained stable at $86.6 billion during the period, showcasing effective debt management and reluctance to take unnecessary debt, it added. The narrative of Pakistan's debt is no longer one of despair but of determination, discipline and decisive action, said Eraj Hashmi. Through strategic reforms, the government has slowed debt accumulation, he added. The government also expects to save Rs1 trillion due to interest rate reduction. Against the allocation of Rs9.8 trillion, the cost may hover around Rs8.7 trillion. In the second half, the estimated interest payment is Rs3.6 trillion, said the finance ministry. During the first half, Rs5.1 trillion was spent on interest payment. The ministry would on Monday undertake the first-ever buyback auction of government bonds. This strategy aligns with international best practices and demonstrates the government's capability to retire debt ahead of maturity.
