Brazil to raise up to 5b yuan in issuance of panda bonds

Brazil formally kicked off plans to issue its first sovereign panda bonds on Thursday, a landmark move that officials said would create new opportunities for bilateral cooperation in financial markets.

The move, which makes Brazil the first Latin American country to issue sovereign panda bonds, shows the growing interest of international issuers in such bonds for diversified and lower-cost funding channels, and this could pave the way for broader participation by international issuers in China's bond market, analysts said.

A panda bond is a renminbi-denominated debt instrument issued by overseas governments or institutions in China's onshore capital market.

On Thursday, Brazil's Ministry of Finance delivered its letter of intent for issuing panda bonds to the National Association of Financial Market Institutional Investors, with officials from China and Brazil attending a ceremony in Beijing marking the occasion.

Brazil plans to raise up to 5 billion yuan ($735 million) with its inaugural issuance of panda bonds.

Pan Gongsheng, governor of the People's Bank of China, said at the ceremony that China's central bank has worked closely with Brazil's Finance Ministry and central bank, delivering tangible outcomes in areas such as local currency cooperation, financial infrastructure connectivity and financial market collaboration.

"We stand ready to offer facilitation to the Ministry of Finance of Brazil in issuing panda bonds in China," Pan said, noting that he believes the successful issuance of the bonds would create more opportunities for bilateral financial cooperation.

He added that there has been a growing appetite for panda bonds from the private sector and sovereign issuers around the world, and the PBOC welcomes more qualified Brazilian institutions to participate in China's financial markets.

Speaking to China Daily on the sidelines of the event, Brazil's Minister of Finance Dario Durigan confirmed that the delivery of the letter of intent on Thursday made Brazil the first Latin American sovereign issuer formally seeking the issuance of panda bonds.

"We are ready to come to China and offer our sovereign bonds from Brazil in the Chinese market as a sign of confidence, and as a sign that we should work together if we want to improve the lives of our people," Durigan said.

Aiming to issue the panda bonds within the next few months, the Finance Ministry of Brazil is also advancing wider capital market cooperation with China, including a bilateral exchange-traded fund connectivity program and information services for Chinese investors in the Brazilian capital market, he added.

Brazil's planned offering would follow inaugural sovereign panda bond issuances by Kazakhstan and Pakistan earlier this year, adding further momentum to the internationalization of the RMB bond market.

According to data from China's central bank, panda bond issuances reached 132.98 billion yuan in the first five months of 2026.

Liu Chunsheng, an associate professor of international economics at the Central University of Finance and Economics, said that issuing panda bonds would help Brazil diversify its external financing, lower funding costs and reduce foreign exchange risks by better matching RMB financing with its growing trade and investment links with China.