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Policy

China unveils guideline for panda bond issuance to further open up bond market

February 02, 2019


Abstract : The National Association of Financial Market Institutional Investors (NAFMII) on Friday officially introduced a guideline for the panda bond issuance to further open up the domestic bond market.

熊猫债券

BEIJING, Feb. 2 (Xinhua) -- The National Association of Financial Market Institutional Investors (NAFMII) on Friday officially introduced a guideline for the panda bond issuance to further open up the domestic bond market.

Panda bonds refer to the yuan-denominated debts sold by foreign issuers in China.

The guideline has detailed information disclosure, the use of funds raised, and regulations about intermediary agencies in terms of the panda bond issuance, which will help promote the development of the panda bond market into a market with transparent rules, efficient mechanisms and standardized processes.

The guideline has clarified the requirements for overseas enterprises' registration documents, documents disclosed during the issuance and the duration, major events, time of disclosure, and language for the disclosure to strike a balance between protecting the investors' interests and motivating enthusiasm of foreign institutions for issuing bonds.

With the opening up of the Chinese capital market and the acceleration of the RMB internationalization, the panda bond market has grown increasingly stronger.

Data shows that by the end of 2018, a total of 41 overseas issuers had completed the registered panda bonds of 383.21 billion yuan at the NAFMII and 87 deals were completed to raise 165.56 billion yuan. To be specific, there were 33 non-financial enterprises abroad, with the panda bonds supporting the development of chip manufacturing, green environmental protection, automobile, port, medicine, electric power, warehousing and logistics, transportation, etc.

The panda bond market has seen diversified issuers and active investors. Since 2018, the number of global top 500 companies represented by the French Air Liquide Group and the Singapore-based Trafigura Group has increased in terms of the panda bond issuance.

With the launch of the Bond Connect program in July 2017, the issuers such as Hungary, the Philippines, and Daimler AG issued the panda bonds to the investors at home and abroad through the program. (Edited by Hu Pingchao, [email protected])

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Keyword: Panda-bond RMB-internationalization

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