Kazakhstan’s issuance of yuan-denominated debt shows developing nations can use ‘panda bonds’ as stepping stones into global capital markets
Meanwhile, in a first for a euro-zone country, Portugal sold 1.99 billion yuan of eight-year debt in the offshore yuan bond market. The country’s debt agency said the securities, nicknamed dim sum bonds, aim to diversify its funding sources and lower interest-rate costs. Portugal’s effort to tap the offshore yuan bond market followed its 2019 issuance of onshore yuan bonds, also known as panda bonds.
Since the last euro-zone debt crisis, economic ties between China and Portugal have deepened. More European countries are considering closer economic ties with China in the face of Washington’s increasingly erratic and aggressive trade and foreign policies. Portugal’s dim sum bonds may be a sign of more to follow.
As for Central Asia, China has been making inroads into the region, especially through its Belt and Road Initiative. The three-year panda bond from Samruk-Kazyna – the fund has an estimated US$88 billion in assets – is priced at a “record-low” annual yield of 2.18 per cent. The bond arrangement shows support and confidence among Chinese institutional investors for the resource-rich country whose economy is the largest in the region.
