Le volume d'émission en demi-mois dépasse celui du mois complet de l'année dernière ! Les obligations Panda restent en vogue en mars, les institutions recommandent d'exploiter la stratégie de "capture de rendement et de levier"

Finance China News March 13 (Editor Zhang Liang, Intern Liang Zefeng) Panda bonds, as a key vehicle for foreign institutions to participate in China’s bond market and promote the internationalization of the Renminbi, continue to see active issuance at the start of 2026.

Since March, major foreign banks and multilateral development institutions have successively issued panda bonds. Dah Sing Bank, BNP Paribas, Deutsche Bank, and Asian Infrastructure Investment Bank have issued panda bonds. Under the combined effects of low domestic financing costs and rising Renminbi demand, the panda bond market is experiencing a high-quality expansion opportunity.

Cumulative issuance exceeds one trillion yuan, panda bond market remains active in March

Panda bonds refer to bonds issued in China by foreign institutions (including foreign companies and offshore Chinese entities) denominated in Renminbi.

In recent years, the size of the panda bond market has been steadily increasing. According to China Chengxin Research reports, by 2025, the cumulative issuance of panda bonds had surpassed one trillion yuan, reaching 1.159 trillion yuan. In 2025, the total issuance exceeded 180 billion yuan, ranking second in history. The proportion of issuance by purely offshore entities rose to nearly 50%, setting a new record.

From the maturity structure, panda bonds are gradually shifting toward medium and long-term maturities, with 3-year and 5-year bonds becoming dominant. The share of bonds with a maturity of 5 years or more significantly increased to over 30% in 2025, reflecting growing investor confidence in the long-term development of panda bonds.

Since March, the panda bond market has remained highly active. According to data from Enterprise Early Warning, in just the first two weeks of March, issuance reached 15.5 billion yuan, already exceeding the total issuance of 13 billion yuan in March 2025.

Additionally, since March, nine panda bonds have been issued across the market, with foreign major banks frequently participating. Deutsche Bank issued a total of 5.5 billion yuan in two tranches of commercial bank bonds, with a 3-year panda bond rate of 1.95% and a 5-year rate of 2.13%. The Asian Infrastructure Investment Bank issued 3 billion yuan in international agency bonds at a rate of 1.7%.

(Source: Enterprise Early Warning, compiled by Finance China)

Notably, three new panda bonds are about to start accruing interest. BNP Paribas plans to issue a total of 5 billion yuan in two tranches of commercial bank bonds on March 17, for general corporate purposes, business activities, and development, with interest payments starting on March 18. Dah Sing Bank plans to issue 5 billion yuan of 3-year commercial bank bonds on March 18, with interest payments starting on March 20.

Lower costs and policy benefits enhance panda bond attractiveness

Why are foreign institutions increasingly participating in the panda bond market? According to research reports summarized by Finance China, this is mainly due to the low interest rate environment, ongoing policy improvements, and rising Renminbi demand.

United Credit states that under a moderately easing monetary policy, the domestic market continues to maintain low interest rates. For example, the 3-year AAA-rated panda bonds issued in the interbank market had an average fixed rate of 2.3% in 2025, a historic low. Despite significant divergence in the Federal Reserve’s monetary easing and rate cut pace, the relative financing cost advantage of the Renminbi remains.

United Credit further notes that in 2026, the panda bond market will face a peak in maturity payments, with a total of 113.23 billion yuan due within the year, nearly doubling from the previous year. Entities such as the New Development Bank, BMW China Capital, and Beijing Capital Group, which face substantial repayment pressures, are expected to continue supporting the primary market issuance through refinancing.

China Chengxin points out that ongoing policy signals of support provide a solid foundation for market development. In terms of fiscal and tax support, the Ministry of Finance and the State Taxation Administration have clarified that, during 2026-2027, interest income from bonds invested by offshore institutions in the domestic bond market will be temporarily exempt from corporate income tax and value-added tax, further enhancing the attractiveness of Renminbi bonds. The People’s Bank of China’s 2026 work conference also explicitly welcomed more qualified offshore entities to issue panda bonds and committed to further deepening high-level financial market opening and facilitating cross-border Renminbi use. As the internationalization of Renminbi continues to deepen in cross-border payments and financial transactions, panda bonds, as an important vehicle for promoting Renminbi internationalization, will continue to benefit.

Market expansion opportunities and institutional strategies involving carry trade and leverage

What is the outlook and investment value of panda bonds in the coming years? Several institutions have provided forecasts for 2026.

United Credit believes that under the joint promotion of the Belt and Road Initiative and multilateral mechanisms, the panda bond market will see opportunities for expansion with diverse participants. As cross-border Renminbi infrastructure improves and market openness increases, more varied issuers are expected to enter. It is projected that in 2026, panda bonds will remain highly active, with issuance continuing at high levels.

China Chengxin suggests that mature issuers’ refinancing needs will continue to support market development. Developing economies and multinational corporations, driven by project financing, expanding Renminbi usage scenarios, and support from multilateral institutions, are expected to be key growth drivers. Improvements in credit rating systems, enhanced cross-border information disclosure, and optimized capital flow management mechanisms may also be critical factors influencing market expansion.

Shenwan Hongyuan forecasts that in 2026, the bond market may continue to exhibit characteristics of “low interest rates and high volatility.” With inflation expectations improving and long-term interest rates at risk of rising, while short-term funding rates remain stable, strategies involving carry trade and leverage in medium- and short-term credit bonds will have relatively high value. The overall shorter duration of panda bonds aligns well with institutional preferences. Coupled with the ongoing process of Renminbi internationalization, the market size is expected to grow rapidly, and investment opportunities in niche segments should be closely watched.

(Compiled by Finance China, Zhang Liang, Intern Liang Zefeng)