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ADB's 2nd issue of Panda bonds helps improve China's capital market
(Xinhua)
Updated: 2009-12-08 10:33
The Asian Development Bank (ADB)'s second issue of 1 billion yuan ($147 million) renminbi-denominated bonds, or Panda bonds in China would improve the nation's capital market and help make it global, expert said on Monday.
Binda N. Lohani, Vice President of ADB said the issue of Panda bond in China's domestic market marks a milestone in Asia's local currency-denominated bond market, where the market value had topped $4.2 trillion in east Asia, he said.
With an annual coupon rate of 4.2 percent and a maturity of ten years, the bond's proceeds will be used to fund private sector clean energy and energy efficiency projects.
The objective is to help reduce the currency risk and provide long- term RMB financing for private enterprises, the bank said.
Hua Jingdong, offical with ADB said since the first issue of Panda bond in 2005, China's local currency bond market had risen more than three fold. ADB was expected to issue more after government approval.
The State Council, or cabinet, approved the Panda bond issuance in 2005. ADB and the International Finance Corporation of the World Bank Group were allowed to issue 2.13 billion yuan of such bonds in the same year.
