Brazil formally kicked off plans to issue its first sovereign panda bonds on Thursday, a landmark move officials said would create new opportunities for bilateral collaboration in financial markets.
As Brazil will become the first Latin American country to issue sovereign panda bonds, analysts said the move has attested to the growing interest of international issuers in panda bonds for diversified and lower-cost funding channels and could pave the way for broader participation by international issuers in China's bond market.
A panda bond is a renminbi-denominated debt instrument issued by overseas governments or institutions in China's onshore capital market.
The Ministry of Finance of Brazil delivered its letter of intent for issuing panda bonds to the National Association of Financial Market Institutional Investors on Thursday, with officials from China and Brazil attending a ceremony in Beijing marking the move.
Brazil plans to raise up to 5 billion yuan ($735 million) with its inaugural issuance of panda bonds.
