Pakistan 'drops' plan to issue Panda Bonds in February 2026

The Pakistani government has again postponed the issuance of Panda Bonds in China, ARY News reported on Wednesday, citing well-placed sources.

Originally planned for February, the Panda Bonds are now likely to be issued in March, sources indicate. This marks the fourth adjustment in the bond issuance schedule due to incomplete preparations by the Ministry of Finance.

Initially, $25 million worth of Panda Bonds was scheduled for February, but the plan has now been deferred.

The bonds are expected to have a three-year tenure with single-digit profit rates, with the Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB) providing up to 95% guarantees.

Sources further revealed that approximately $25 million equivalent in Chinese yuan will be raised initially from the bonds. Plans are also in place to secure foreign exchange through alternative channels for the repayment of Eurobonds in April 2026, when $1.2 billion will be due.

The central bank has decided to avoid putting additional pressure on its foreign exchange reserves, which currently stand at $2.133 billion.

Additionally, Pakistan is expected to discuss another $1 billion with the IMF during the fourth economic review.

Finance Minister Muhammad Aurangzeb earlier stated that the Pakistan Panda Bond would be settled in Chinese yuan and is likely to increase between $200 million and $300 million.

The issuance would be structured with support from multifaceted development institutions, including the Asian Infrastructure Investment Bank (AIIB), which may provide credit guarantees.