| Panda bonds | |||||||
|---|---|---|---|---|---|---|---|
| Traditional Chinese | 熊貓債券 | ||||||
| Simplified Chinese | 熊猫债券 | ||||||
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A Panda bond is a Chinese renminbi-denominated bond from a non-Chinese issuer, sold in the People's Republic of China.[1] The first two Panda bonds were issued in October 2005 on the same day by the International Finance Corporation and the Asian Development Bank. Their terms were 1.13 billion yuan of 10-year bonds at a 3.4% yield and 1 billion yuan of 10-year bonds at a 3.34% yield. [2] [3] The Chinese government had been negotiating for several years about implementation details before permitting the sale of such bonds; they had been concerned about the possible effects on their currency peg. Eventually, it was agreed that funds raised from sales of Panda bonds would have to remain in China; issuers would not be permitted to repatriate such funds.[2]
In May 2010, rules were liberalised and more issuers were allowed, with the restriction on proceeds not being remitted abroad lifted.[4]