Aurangzeb calls Pakistan’s first Panda bond a historic milestone after CNY 1.75 billion debut in China

Pakistan has raised CNY 1.75 billion through its first Panda Bond, becoming the first South Asian country to issue sovereign debt in China’s domestic capital market, Finance Minister Muhammad Aurangzeb said on Friday.

The sustainable bond, issued under a CNY 7.2 billion programme established after two years of preparation, was oversubscribed, indicating strong demand from Chinese institutional investors.

Aurangzeb, speaking at a ceremony in Beijing, described the transaction as a “historic milestone” and said it opened a new chapter in Pakistan’s economic and financial engagement with China and international capital markets.

The proceeds will be used to finance projects in the water, energy and health sectors, making it Pakistan’s first Sustainable Panda Bond.

The finance minister said the issuance was intended to establish Pakistan’s long-term presence in China’s onshore bond market and create a platform for future sovereign offerings.

He said the successful sale reflected increasing confidence among Chinese investors in Pakistan’s economic outlook and reform programme.

Aurangzeb said Pakistan’s economy had regained stability, citing stronger economic growth, sharply lower inflation, improved foreign exchange reserves, fiscal consolidation and a more stable external account supported by exports and remittances.

He said the government was pursuing tax reforms through digitalisation and expansion of the tax base, implementing energy-sector measures to reduce circular debt, and advancing restructuring and privatisation of state-owned enterprises.

Aurangzeb reaffirmed Pakistan’s commitment to its programme with the International Monetary Fund, saying continued implementation of reforms had strengthened macroeconomic fundamentals and boosted investor confidence.

China International Capital Corporation acted as lead underwriter, with Bank of China, Standard Chartered and Hongta Securities serving as joint lead underwriters. Habib Bank Limited was the financial adviser.

Credit enhancement guarantees were provided by the Asian Infrastructure Investment Bank and the Asian Development Bank.

Aurangzeb said the bond sale marked the start of a long-term relationship between Pakistan and China’s capital markets.