Pakistan to Issue First Panda Bonds Soon

Pakistan is planning to tap into China’s bond market for the first time by issuing Panda bonds yuan-denominated debt before the end of December 2025. The initial target is to raise about USD 250 million, although the government has floated a slightly larger figure of USD 300 million in some statements, depending on approvals and documentation.

Because Pakistan currently holds a sub-investment grade sovereign rating, the government is securing credit guarantees from multilateral lenders to help make the bond more attractive to institutional investors. The Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB) have committed guarantees totalling around USD 285 million to cover principal and unpaid interest obligations, offering up to 95% indemnity.

The bond is expected to have a three-year tenor with an indicative coupon rate between 3% and 4% per annum, and it will be placed privately on China’s interbank market, offered to qualified institutional investors. The government has already carried out pre-marketing investor roadshows (non-deal roadshows) in Beijing and put together a consortium of financial advisers and underwriters, including China International Capital Corp Ltd. and Habib Bank Ltd.

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