Deutsche Bank (DB) has issued its inaugural panda bond, raising 1 billion yuan (US$147.72 million) via three-year senior preferred notes, in a transaction that enabled the bank to directly tap into China’s deep onshore bond market and access a new investor base at attractive funding levels.
The deal, whose proceeds will be used for general group funding purposes, marks the first panda bond following recent regulatory changes by the People’s Bank of China and the State Administration of Foreign Exchange to facilitate foreign remittance of panda bond proceeds.
DB is one of only two foreign banks to hold a full lead underwriting (type A) licence in China, has previously issued dim sum bonds via the Southbound Bond Connect and is fully committed to contributing to yuan internationalization through participation in onshore and offshore markets.
“The bank’s panda bond issuance demonstrates the value of accessing the onshore market for international issuers,” DB China’s chief country officer Rose Zhu adds. “China continues to improve its regulatory framework for panda bonds, and the market is a key focus for our franchise.”
“China’s onshore bond market is the second largest in the world,” says Alexander von zur Muehlen, DB’s Asia-Pacific CEO. “Increased international investor and issuer activity is an important step in China’s capital market opening and global financial system integration.”