ISLAMABAD:Pakistan will launch its first-ever Panda Bond tranche in January, seeking to raise $250 million in the initial phase.
The government has ruled out issuing a Eurobond or Sukuk during the current fiscal year and has instead adopted an alternative financing strategy by preparing for the launch of Pakistan’s first-ever Panda bond in the Chinese market, aimed at raising $250 million in the initial phase.
According to official sources, the Panda bond is expected to be issued by mid-January 2026, with the Prime Minister’s Office granting formal approval for the launch by January 31. A second phase of the programme, valued at $500 million, is expected to be completed before June 30, 2026.
Senior government officials told that the Panda bond is likely to be issued at an interest rate of around 4 percent. Pakistan faces two major external repayments during the current fiscal year due to the maturity of Eurobonds.
The first instalment of $500 million was paid in September 2025, while the second payment is due in April 2026, amounting to $1.3 billion, including $1 billion in principal and $300 million in interest.
Meanwhile, the International Monetary Fund (IMF) has expressed reservations over the government’s plan to issue Panda bonds in the Chinese market, questioning why Pakistan is not opting for commercial borrowing if Chinese banks are expected to be the main buyers.
In response, Pakistani authorities informed the IMF that the government is pursuing diversification of its financing sources and aims to strengthen its presence in the Chinese capital market through the issuance of Panda bonds.
