Panda Bonds Gain Global Momentum as New Issuers Enter China's Market
The panda bond market—where non-Chinese issuers raise renminbi (RMB) funds in China's onshore bond market—is attracting fresh international interest. In a landmark move on July 22, Hungary, with the Bank of China (BOC) acting as lead underwriter and book runner, issued 5 billion yuan ($698 million) of sovereign panda bonds. This represents both the largest single sovereign panda bond issuance to date and Hungary's first five-year sovereign panda bond.
The issuance was split into a three-year tranche of 4 billion yuan at a 2.5% coupon and a five-year tranche of 1 billion yuan at a 2.9% coupon, highlighting growing financial collaboration between China and Hungary. Hungary was the first European country to sign a Belt and Road Initiative cooperation agreement with China and has increasingly deepened partnerships in trade, finance, and green energy. Since 2017, Hungary has cumulatively issued 11 billion yuan in panda bonds, making it the largest sovereign panda bond issuer in terms of outstanding volume.
The panda bond framework has also attracted corporate issuers. Earlier this year, BOC supported Morgan Stanley in issuing 2 billion yuan of five-year panda bonds—the first by a U.S.-headquartered company—drawing strong demand from a diverse pool of investors. Meanwhile, Mercedes-Benz Financial Services issued China's first green panda bond outside Europe in 2022, while African and South American issuers have also entered the market: Egypt issued 3.5 billion yuan of sustainable panda bonds in 2023, and Suzano International Finance B.V. issued 1.2 billion yuan of green panda bonds in 2024, marking the first panda bond issuance in South America.
As of mid-2025, BOC has assisted over 70 foreign issuers in raising nearly 300 panda bonds, totaling more than 570 billion yuan. Cumulative panda bond issuance across the market has surpassed 1 trillion yuan, establishing the segment as a cornerstone for China's financial opening-up and a key instrument for Belt and Road Initiative-related financing.
By leveraging its global underwriting and distribution network, BOC continues to position panda bonds as a high-quality, diversified financing channel, attracting international participants and reinforcing China's capital market as an accessible platform for global issuers.
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