Poland has now become the first European country to issue debt in the China’s mainland bond market, setting a benchmark for future issues.
The RMB3 billion ($449 million) deal, which closed in late August, also tested regulations for the still nascent so-called panda market, which opened to non-financial corporates last year.
The three-year bond with a 3.4% yield was also Poland’s first yuan-denominated issue, helping to diversify its investor base. It was nearly two times oversubscribed by Chinese commercial banks, foreign banks and asset managers.
“Poland has shown itself to be a sophisticated borrower, doing benchmark bonds in the Japanese yen and German schuldschein markets in recent years,” said Odilbek Isakov, director of emerging markets, public sector DCM at HSBC, who led the deal. “The panda is really the next chapter for them.”