Panda Bond Market Heats Up, Nearly 64 Billion Yuan Issued This Year, Doubling Year-over-Year

On March 17, BNP Paribas in France will issue its first RMB Panda Bond for 2026 (Bond Connect) in the National Interbank Bond Market, with a maximum issuance amount of 5 billion RMB. Industry insiders say this marks another top European financial institution joining the ranks of Panda Bond issuers.

This year, Panda Bonds have had a strong start. According to Wind data based on the bond start date, as of March 15, the issuance scale of Panda Bonds this year has reached 63.935 billion RMB, a year-on-year increase of 108%.

Ming Ming, Chief Economist at CITIC Securities, said that the main reasons for the hot Panda Bond issuance this year include the China-U.S. interest rate differential advantage, the Federal Reserve maintaining high interest rates while China continues to implement moderately loose monetary policy, and the significantly lower financing costs of RMB compared to USD. At the same time, the internationalization of RMB is steadily advancing, and international investors’ demand for RMB assets is rising.

Song Xiangqing, Vice President of the China Business Economics Society, stated that the enhancement of RMB cross-border settlement and international reserve status has created strong demand from multinational companies and others for RMB financing and currency matching. Coupled with the high enthusiasm of domestic and foreign investors for RMB assets and the expansion of innovative products like green Panda Bonds, these factors jointly drive a substantial year-on-year increase in Panda Bond issuance.

Alongside the significant expansion in scale, recent Panda Bond issuances have also been noteworthy.

For example, on March 11, Bank of China, as the lead underwriter and bookrunner, helped Hong Kong-funded China Power (China) Co., Ltd. successfully issue 1 billion RMB of 3-year green Panda Bonds. This bond is also the first non-financial corporate green Panda Bond issued under a green bond framework. Additionally, the Asian Infrastructure Investment Bank (AIIB) recently successfully issued 3 billion RMB of 3-year Panda Bonds, with 34 investors participating in the subscription, and a total order amount of 9 billion RMB, both hitting record highs.

Furthermore, on March 6, Deutsche Bank announced that it successfully priced and issued 5.5 billion RMB of multi-tenor Panda Bonds in the interbank bond market. This is the first Panda Bond issued by a European Union financial institution in 2026 and also broke the record for the largest single Panda Bond issuance by a foreign bank. The issuance attracted a total of 8.66 billion RMB in orders, with the 3-year and 5-year tranches receiving oversubscriptions of 1.55 times and 1.63 times, respectively. Ju Tong, General Manager of Deutsche Bank China, said this reflects investors’ high recognition of Deutsche Bank’s credit strength and long-term strategy, as well as the continued attractiveness of the RMB bond market to diversified investors.

Song Xiangqing stated that this year, the Panda Bond market is expected to continue to be supported by five key aspects: policy support, cost advantages, refinancing needs, internationalization, and product innovation. The cost advantage is expected to persist, with a stable domestic liquidity environment benefiting low-cost financing for foreign institutions. Meanwhile, the rising maturity scale of Panda Bonds within the year will create rigid refinancing needs, providing a resilient foundation for the market. Additionally, continuous innovation in green and themed bonds, along with the advancement of RMB internationalization, will jointly sustain high market activity and high-quality expansion.

Ming Ming noted that the supporting factors for the Panda Bond market this year include: first, an expansion in issuing entities, with more international multilateral institutions, sovereign wealth funds, and multinational companies expected to join; second, accelerated product innovation, with growth in ESG products like green Panda Bonds aligning with global sustainable investment trends; and third, an expanded investor base, with increased participation from overseas institutions.