Indonesia issues record 10b yuan panda bonds in China

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Indonesia has issued a record 10 billion yuan ($1.49 billion) in panda bonds in China's interbank bond market, marking its return to the market after a debut offering in July and…

Indonesia has issued a record 10 billion yuan ($1.49 billion) in panda bonds in China's interbank bond market, marking its return to the market after a debut offering in July and signaling its commitment to deepening financial ties with China and expanding yuan financing.

The three-tranche issuance, priced on Tuesday with maturities of three, five and seven years, is the largest panda bond offering to date. It is also the first by a sovereign panda bond issuer to include three tranches and a seven-year tenor, according to China International Capital Corporation, which acted as lead underwriter and lead bookrunner.

The issuance comprised 5.7 billion yuan in three-year bonds with a coupon rate of 1.96 percent, 3.7 billion yuan in five-year bonds at 2.15 percent, and 600 million yuan in seven-year bonds at 2.5 percent.

CICC helped the Indonesian government adopt a more market-oriented and flexible multi-tranche structure to better meet the needs of domestic and international investors.

The deal is a testament to the deepening comprehensive strategic partnership between China and Indonesia and represents a landmark financial initiative under high-quality Belt and Road cooperation. It also provides another example for Southeast Asian entities seeking to access China's bond market, helping strengthen regional financial connectivity and inject fresh momentum into building a closer China-ASEAN community with a shared future, CICC said in a post on its official WeChat account.

The offering attracted strong participation from a broad range of domestic and international institutional investors. It sets a new benchmark in the internationalization of the renminbi, provides high-quality yuan-denominated assets for domestic and overseas investors, and establishes a benchmark medium- to long-term yield curve for the panda bond market. The deal also highlights China's progress in developing its capital market to a higher standard and further opening it up to the world, CICC said.

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