New Development Bank Issues 3 Billion Yuan in Panda Bonds

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The Shanghai-headquartered New Development Bank (NDB) has made an issue of 3 billion yuan in panda bonds on the interbank market with the aid of big state-owned lender Bank of China (BOC).

The panda bonds issued on China’s interbank market on 25 October have a term of 3 years and a coupon rate of 2.53%.

BOC served as lead underwriter for the NDB issue – marking the fifth consecutive time that the big state-owned bank has served in this capacity.

Funds raised by the issue will be used for infrastructure development and sustainable development projects amongst NDB’s member states.

NDB, formerly known as the BRICS Development Bank, is a multilateral financial institution that was established by the BRICS nations of Brazil, Russia, India, China and South Africa.

According to state-owned media NDB has issued 33 billion yuan in panda bonds – renminbi-denominated bonds from non-Chinese issuers, making it the largest supersovereign issuer on the market.

The Chinese central bank has driven improvements to the panda bond market in recent years as part of efforts to facilitate the internationalisation of the renminbi.

“Panda bonds are a leading product for the external opening up of China’s capital markets and the renminbi internationalisation strategy,” said a report from state-owned media.

“Bank of China, as an important underwriter and participant in the panda bonds market, will continue to employ its specialist advantages in cross-border bond operations, and make the contribution of more benchmark issues on the panda bond market.”