Panda bond, a RMB-denominated bond issued in China, has gained increasing traction from overseas companies from the year to date. During the first half of 2016, ICBC underwrote panda bonds worth of more than RMB 5 billion for overseas companies.

This year, ICBC successfully issued the first tranche of Panda bond worth RMB 600 million in public placement for Semiconductor Manufacturing International Corporation, securing the lowest price ever for non-financial enterprises in the bond market. In addition, ICBC also issued Panda bonds worth RMB 4 billion for Daimler Group in private placement, representing the largest single panda bond for a non-financial business, realizing full coverage of private and public placement for bonds of non-financial enterprises.

An expert pointed out that as the internationalization of RMB accelerated, especially when RMB joined SDR, China’ s capital market has experienced deepening two-way opening with domestic bond market gaining traction. The regulatory authorities also released new rules on issue of Panda bonds featuring expanded scope of issuers and streamlined issue process, which provides favorable conditions for the rapid growth of Panda bonds. By leveraging strong distribution and cross-border service capability,  bond underwriters including ICBC have been keen to provide direct domestic financing for foreign quality customers, fueling the development of the panda bond market.