NDB Hosts Seminar to Discuss Ways to Further Improve Panda Bond Issuance

On July 12, 2024, the New Development Bank (NDB) hosted a Panda Bond seminar at the Shanghai Clearing House, titled “Promoting High-Level Openness in Financial Markets and Advancing the Development of Shanghai as an International Financial Center.” More than 100 representatives from regulatory agencies, self-regulatory organisations, financial infrastructure entities, issuers, underwriters, and investors explored the current status and future trends of the Panda Bond market.

NDB has been an active participant in the Chinese interbank bond market since 2016, issuing a total of RMB 47.5 billion in Panda Bonds with an outstanding balance of RMB 31.5 billion, making it the largest issuer in the Panda Bond market. NDB’s Panda Bonds essentially function as Policy Bank bonds. They serve as a means for NDB to raise funds in the Chinese market to finance infrastructure and sustainable development projects in its member countries, following the model of supranational bonds issued by global entities.

The seminar was attended by Monale Ratsoma, NDB’s newly appointed Vice President and Chief Financial Officer; Jin Zhongxia, Director General of the Treasury and Investment Department of NDB; Zhang Bo, Deputy Director of the World Bank Loan Project Evaluation Center of the Ministry of Finance; Ma Jianyang, Chairman of the Shanghai Clearing House, amongst others.

“NDB will continue to improve its access to capital markets and diversify its currency mix by exploring opportunities in local currency borrowing. The China Interbank Bond Market is crucial for NDB’s funding operations,” said Monale Ratsoma. He highlighted the Bank’s General Strategy for 2022-2026, which aims to provide USD 30 billion over five years to member countries, with a significant focus on climate change, non-sovereign operations, financing in local currencies and co-financing with other multilateral development banks.

NDB is actively working to build an international cooperation platform, promote diversified investment and financing and advance high-level financial openness. This Seminar marks a significant step forward in that direction.

Jin Zhongxia expressed NDB’s interest to remaining the largest issuer in the Panda Bond market and an important international participant in related financial markets.  He emphasised NDB’s intention to collaborate with all parties to gradually increase issuance volume, frequency, expand and consolidate the investor base domestically and internationally, enhance secondary market liquidity, and improve the yield curve. He also highlighted NDB’s strong financial position and its aim to become a benchmark for other international issuers, given its ample capital, preferred creditor status internationally, high asset quality, robust risk management, sufficient liquidity, and dedicated support from member country governments.

Background Information

The New Development Bank was established in 2015 by Brazil, Russia, India, China, and South Africa to support infrastructure and sustainable development projects in BRICS countries and other emerging economies and developing countries. It aims to complement existing multilateral and regional financial institutions and contribute to global growth and development. In 2021, NDB welcomed Bangladesh, Egypt, the United Arab Emirates, and Uruguay as new member countries.