Recently, as a key institutional investor, CBHB (HKEX: 09668) actively participated in and successfully subscribed to the inaugural sovereign panda bond issued by the Islamic Republic of Pakistan in China's interbank market. This marks Pakistan's debut in China's onshore renminbi bond market and represents the first sovereign panda bond from South Asia. By taking concrete action, CBHB supports innovative financing practices under the multilateral development institution collaborative framework, aids in deepening and solidifying the China-Pakistan Economic Corridor (CPEC), and contributes pivotal momentum to the evolution of bilateral financial cooperation from traditional credit to capital market connectivity as the two nations celebrate 75 years of diplomatic relations.
The bond issuance had a total size of RMB 1.75 billion with a 3-year tenor and a coupon rate of 2.50%, receiving over 5 times oversubscription. It is the first sovereign panda bond in the domestic market to adopt a non-full guarantee structure, backed by an unconditional and irrevocable joint guarantee from the Asian Infrastructure Investment Bank (AIIB) and the Asian Development Bank (ADB), with a principal and interest coverage ratio of 95%. The raised funds will be specifically allocated to sustainable development projects in Pakistan's water, energy, and health sectors, which are expected to deliver significant economic, social, and environmental benefits.
Securing Scarce Credit-Enhanced Assets and Strengthening Cross-Border Allocation Capabilities
In recent years, China's panda bond market has consistently expanded and improved in quality, with its issuer base now extending to major global economies and multilateral development institutions, making it a significant engine for renminbi internationalization. CBHB has consistently positioned cross-border renminbi investment and financing as a core direction for its differentiated development, maintaining a deep focus on the panda bond and related cross-border bond sectors. This successful participation in Pakistan's first sovereign panda bond represents a major breakthrough for the bank, building upon its existing cross-border bond business.
Through market-driven allocation of scarce sovereign renminbi assets that combine "multilateral institutional credit enhancement" with "sustainable development attributes," CBHB has further refined its sovereign asset allocation footprint in countries along the Belt and Road Initiative. By anchoring benchmark projects, the bank continues to solidify its core "bond bank" capability in cross-border asset configuration.
Building a Two-Way Ecosystem to Facilitate Cross-Border RMB Circulation
While actively seizing "northbound" allocation opportunities, such as panda bonds where foreign issuers raise capital in China's domestic bond market, CBHB is continuously enhancing its two-way cross-border financial service system that facilitates both "bringing in" and "going global." Leveraging the Bond Connect "southbound" mechanism, which allows domestic investors to access the Hong Kong and offshore renminbi bond markets, the bank is steadily expanding its investment channels in offshore renminbi bond markets, achieving diversification of its investment portfolio across geographies and currencies.
By constructing a full-chain infrastructure covering the panda bond ecosystem, southbound allocation, and cross-border settlement and clearing, CBHB not only provides professional services for foreign entities seeking financing in China but also establishes a safe and efficient financial pipeline for the steady outward flow of domestic renminbi funds. This shift from a "one-way" to a "two-way" approach is focused on creating a complete ecosystem for cross-border renminbi circulation.
As a flagship project of the Belt and Road Initiative, the China-Pakistan Economic Corridor has achieved globally recognized accomplishments over its more than decade-long operation. The successful issuance of Pakistan's first panda bond represents a major achievement for the corridor in the financial domain. CBHB stated that, going forward, it will continue to thoroughly implement the guiding principles from key national financial conferences. It will focus on advancing core financial priorities, closely follow the main themes of renminbi internationalization and high-standard financial opening, and persistently increase its allocation of high-quality sovereign and quasi-sovereign renminbi assets along the Belt and Road.
Simultaneously, by leveraging initiatives such as panda bond ecosystem development, southbound investment services, and the enhancement of cross-border settlement networks, CBHB aims to provide comprehensive, end-to-end cross-border financial service solutions for Chinese enterprises expanding globally and for foreign entities entering the Chinese market. This effort is intended to contribute CBHB's strength to serving national strategies and promoting the high-quality development of the real economy.