The Government of Pakistan has once again postponed the issuance of its planned Panda Bonds in China, according to ARY News, citing informed sources. The sovereign yuan-denominated bond issuance, initially scheduled for February, is now expected to take place in March due to incomplete preparations by the Ministry of Finance. This marks the fourth revision in the timeline for the Panda Bond launch.
Officials had earlier planned to raise around $25 million through the Panda Bonds in February, but the issuance has been deferred. The bonds are expected to carry a three-year maturity period with single-digit profit rates, making them an attractive instrument for raising foreign funding in the Chinese capital market. The issuance is likely to be backed by strong credit enhancement, with up to 95 percent guarantees from the Asian Development Bank and the Asian Infrastructure Investment Bank.
Sources indicate that the initial tranche will raise the equivalent of approximately $25 million in Chinese yuan. The government is also exploring alternative foreign exchange arrangements to manage upcoming external debt obligations, including the repayment of $1.2 billion in Eurobonds due in April 2026. Authorities are aiming to avoid additional pressure on foreign exchange reserves, which currently stand at $2.133 billion.
In parallel, Pakistan is expected to discuss a potential $1 billion arrangement with the International Monetary Fund during the fourth economic review. Finance Minister Muhammad Aurangzeb previously stated that the Pakistan Panda Bond will be settled in Chinese yuan and could eventually range between $200 million and $300 million, depending on market conditions and investor appetite.
The Panda Bond issuance is part of Pakistan’s broader strategy to diversify external financing sources, strengthen foreign exchange liquidity, and reduce reliance on traditional dollar-denominated borrowing by tapping into China’s onshore bond market with multilateral development institution support.