Largest Panda Bond for a Financial Institution Since 2018 Issued Via Our Site; European Issuers Significantly Contributed to Renminbi Financing, Accounting for Nearly 20% of Total Panda Bond Issuance Since 2005
In a significant move for the global financial market, Morgan Stanley has successfully issued a record-breaking Panda bond in China's interbank bond market. This marks the largest Panda bond issuance by a financial institution since 2018.
The bond, worth 2 billion renminbi (approximately 280 million US dollars), was issued as 2-year Senior Preferred notes. The transaction attracted an order book of over 8 billion renminbi (1.1 billion US dollars), demonstrating strong investor demand.
Morgan Stanley's Panda bond issuance is noteworthy as it also marks the first such issuance by a U.S.-headquartered firm. The bond has a five-year maturity and a 1.98% coupon rate, reflecting the confidence of domestic investors in the issuer.
This issuance follows Morgan Stanley's successful return to the Singapore Dollar bond market last month. The proceeds of this transaction will be used for general business activities and development.
Expanding the Panda Bond Issuer Base
Morgan Stanley's Panda bond issuance aims to diversify the Panda bond issuer base, providing high-quality assets to Chinese investors. This move aligns with the People's Bank of China's (PBOC) strategy to broaden foreign issuer participation in the Panda bond market.
Under the guidance of the PBOC and market supervisory bodies, the Panda bond market continues to see an increase in foreign issuer participation, including governments, multilateral institutions, and multinational corporations.
Impact on RMB Bond Market
The Morgan Stanley deal exemplifies expanding foreign participation and broadening the investor base in China's interbank bond market. In 2025, foreign entities accounted for 50% of the 111.2 billion yuan Panda bond issuances, up 27 percentage points from 2024.
The broadening of issuers and investors enhances the institutional quality and liquidity of the RMB bond market. Recent large issuances by the Asian Infrastructure Investment Bank (AIIB) and others have seen record demand and the tightest spreads in years, signaling improved market depth and investor confidence.
Morgan Stanley's Longstanding Track Record
This is the third Panda bond issuance by Morgan Stanley in 2023. The order book for this issuance exceeded 8 billion renminbi (1.1 billion US dollars), reflecting the strong demand for Morgan Stanley's bonds in the Chinese market.
Alexander von zur Muehlen, CEO for Asia Pacific, Europe, Middle East & Africa (EMEA) and Germany, and Member of the Management Board at Morgan Stanley, stated that the company is proud of its longstanding track record of driving international participation in China's onshore bond market.
Continued Growth in the Panda Bond Market
2023 saw historic levels of issuance for the Panda bond market, with activity set to continue throughout this year. The Panda bond market, which serves as an important financing channel for international institutions to raise funding in RMB, has grown significantly since its launch in 2005.
With the increasing acceptance and integration of foreign financial institutions in China’s onshore debt market, the globalization of China’s bond market and RMB internationalization continue to progress.
Finance and capital markets are at the forefront as Morgan Stanley's Panda bond issuance, amounting to 2 billion renminbi, demonstrates strong investor demand in the Chinese interbank bond market. The successful issuance also marks a significant step towards expanding the Panda bond issuer base, thereby aligning with the People's Bank of China's strategy to broaden foreign issuer participation.
