JBIC mulling Panda Bond issuance

February 5, 2018

Tokyo- The Japan Bank for International Cooperation is considering issuing yuan-denominated bonds in mainland China, known as panda bonds, Governor Akira Kondo has told Jiji Press.

The government-held lender hopes to help diversify channels to procure yuan funds for Japanese companies that are expanding business in China, particularly automobile-related companies.

"If there is demand for yuan-based loans among Japanese companies, we'll consider issuing panda bonds, even though some issues must be resolved," such as a financial regulatory screening, Kondo said in a recent interview.

Panda bonds refer to fixed-income instruments issued in mainland China by foreign lenders and companies. The ban on panda bond issuance by Japanese entities was lifted late last year thanks to an improvement in relations between Japan and China.

Last month, Bank of Tokyo-Mitsubishi UFJ and Mizuho Bank became the first Japanese companies to issue such bonds.

JBIC has worked with the Export-Import Bank of China in fund establishment for environment protection and other fields under a business cooperation deal concluded in 2008.

"We want to cooperate with the Export-Import Bank of China also in syndicated loans," Kondo said.

Kondo added that JBIC hopes to issue local currency-based bonds also in Malaysia, India and elsewhere to support large-scale projects in the countries involving Japanese companies. Jiji Press