Afreximbank Taps Chinese Market with $303M Panda Bond Debut
Deal News | Apr 01, 2025 | Zawya
Afreximbank, a prominent African financial institution, successfully entered the Chinese onshore market with a Rmb2.2bn ($303m) three-year Panda bond issuance. This marks the bank as the second African entity to issue bonds in this market, following Egypt's example earlier in the year. Amidst challenges linked to credit ratings and the need for guarantee structures, Afreximbank's successful issuance highlights increasing Chinese financial involvement with African entities, as emphasized by Chinese President Xi Jinping's commitment to $360bn in support over the next three years. The bond issuance faced hurdles, such as stringent regulatory requirements and the logistical challenges of not having the time to arrange a roadshow. Managed by lead and joint underwriters from major Chinese banks, the issuance demonstrates competitive pricing, despite recent market fluctuations, and aims at supporting Afreximbank's operations both onshore and offshore.
Sectors
- Financial Services
- Investment Banking
Geography
- China – China is the host market for the Panda bond issuance and is playing a crucial role in fostering economic ties with Africa.
- Africa – Afreximbank, the issuer from Africa, underscores the significance of this geography to the story.
Industry
- Financial Services – This sector is relevant as the article discusses bond issuance, financial markets, cross-border financial transactions, and international banking.
- Investment Banking – Involvement of underwriters and bookrunners from major banks highlights this sector's relevance.
Financials
- $303 million – Total value of Afreximbank's Panda bond issuance.
- 2.99% – Yield at which the Panda bond was priced.
- Rmb2.2bn – Amount raised from the Panda bond issuance.
- Up to 80% – Proportion of proceeds allowed to be used offshore.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Afreximbank | Issuer | Company | Afreximbank is the African Export-Import Bank issuing the Panda bond. |
| Bank of China | Lead Underwriter and Bookrunner | Company | Bank of China played a central role in the issuance of the bond. |
| Export-Import Bank of China | Joint Lead Underwriter and Bookrunner | Company | A Chinese bank jointly underwriting the bond issuance. |
| Industrial and Commercial Bank of China | Joint Lead Underwriter and Bookrunner | Company | Another key Chinese financial institution involved in the underwriting process. |
| African Development Bank | Guarantor in Prior Issuance | Company | Provided guarantees in Egypt's earlier issuance in the Chinese onshore market, relevant for context. |
| Asian Infrastructure Investment Bank | Guarantor in Prior Issuance | Company | Worked alongside AfDB in Egypt's bond issuance. |
| City and Rural Commercial Banks (China) | Investors | Company | Potential investors as noted in the discussion about Chinese banks' preferences. |