Pakistan has postponed its plan to issue Panda Bonds in 2025. Official sources confirm the government has dropped its initial strategy to raise $250 million in the Chinese capital market this December. Authorities now anticipate a new launch window in January or February 2026.
This delay marks the third time the government has altered the issuance plan for these bonds. The postponement is due to a pending credit guarantee approval from the Asian Infrastructure Investment Bank (AIIB).
The bond issuance relies heavily on credit enhancement from two major multilateral institutions. The Asian Development Bank (ADB) and the AIIB were set to provide a guarantee covering up to 95% of the bond value.
Read: Pakistan Plans $750M via Panda Bonds for Debt Repayments
The ADB Board has already approved its portion of the guarantee. However, the AIIB Board has not yet granted its final approval, which is necessary for the deal to proceed. The AIIB Board is likely to hold its crucial meeting by the end of this month or next month. Once the board grants its approval, the government can decide on a definitive issuance date.
Key Terms of the Proposed Panda Bonds
The proposed financial instrument carries specific terms designed to support Pakistan’s economic strategy.
- Tenure and Rate: The Panda Bonds will have a three-year tenure with a fixed interest rate. The government expects to secure financing at a cost of less than 10%.
- Currency and Size: Finance Minister Muhammad Aurangzeb previously stated that the bonds would settle in Chinese yuan. The issuance is expected to raise between $200 million and $300 million.
This venture into the Chinese debt market represents a strategic effort to diversify Pakistan’s sources of foreign financing. The structure, which involves credit guarantees from multilateral institutions like AIIB, aims to make the offering more attractive to investors and secure favorable terms for the country
