China’s Panda Bonds Attract Wall Street and Foreign Borrowers

Foreign borrowers are turning to panda bonds as China’s borrowing costs remain lower than dollar funding. Beijing’s relaxation of capital restrictions has increased the appeal of yuan-denominated debt, supporting China’s effort to expand global yuan usage. Issuance of panda bonds has surged, with countries like Kazakhstan and Pakistan, along with financial giants like Morgan Stanley and Deutsche Bank, and companies such as Volkswagen and Henkel, all tapping into the market. Deutsche Bank recently raised 3.5 billion yuan through a successful panda bond offering. Moody’s data shows that panda bond issuance hit a record high in 2024 and continues to grow…