First Japanese panda bonds issued

PandasA unit of Mitsubishi UFJ Financial Group has issued what it claims are the first panda bonds from a Japanese issuer. The Bank of Tokyo-Mitsubishi UFJ gained approval early this month to issue the panda bonds, which are renminbi-denominated bonds issued by foreign entities onshore in China. “The issuance of panda bonds will lead to the establishment of a longer-term yuan procurement route while stabilising procurement by diversifying yuan procurement methods,” said a statement from the bank. The bank sold 1 billion renminbi ($155 million) of three-year bonds at a 5.3% fixed coupon. The transaction is the latest in a series of the firm's efforts to raise renminbi financing, which included offering offshore renminbi-denominated bonds in the Japanese market, known as Fujiyama bonds. In 2010, the bank's Chinese subsidiary issued renminbi-denominated bonds onshore in China. Mizuho Bank, another Japanese company, is also reported to be planning to issue panda bonds. Chinese and Japanese authorities reached an agreement at the end of December on a framework to allow panda bonds from Japanese issuers. ©2018 funds global asia

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