NAIROBI, April 8 (Reuters) - The Africa Export-Import Bank (Afreximbank) has raised 2.2 billion renminbi ($299.90 million) through its first issuance of a Chinese panda bond, it said on Tuesday, charting a path for other African entities seeking new avenues of fundraising.
China has pledged to open up its domestic markets for African issuers to borrow money through the so-called panda bonds - debt issued on its domestic bond market and denominated in yuan.
However, those looking to use the opportunity face several hurdles, including issuing in a currency that is not globally freely traded.
"The issuance ... followed Afreximbank's successful navigation of the rigorous regulatory and approval processes for Panda bond issuance," the lender said in a statement.
Afreximbank's new panda bond has a 2.99% interest rate, it said. Bank of China Limited served as the lead underwriter and bookrunner, while Exim Bank of China and ICBC were the joint lead underwriters.
The panda issue is the first by an African multilateral financial institution, but the second by any African entity, after Egypt, which issued a panda bond in 2022.
"This issuance highlights Afreximbank's commitment to diversifying its funding sources and to tapping into new pools of capital," said Chandi Mwenebungu, the head of treasury and markets division at the Cairo-based lender.
Panda bonds were first launched in 2005, when the Asian Development Bank and the International Finance Corporation, the World Bank's private investment arm, pioneered them. Issuance hit a record high of 195 billion yuan in 2024, according to Deutsche Bank calculations.
($1 = 7.3358 Chinese yuan renminbi)
(Reporting by Duncan Miriri; Editing by Kim Coghill)
((duncan.miriri@thomsonreuters.com; Tel: +254 20 4991239; Reuters Messaging: duncan.miriri.thomsonreuters.com@reuters.net))
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