Por­tu­gal to is­sue ‘panda bonds’ in eu­ro­zone first

Daily Mirror (Sri Lanka) - - FOREIGN -

(Lis­bon) AFP: Por­tu­gal plans to be­come the first eu­ro­zone nation to is­sue so-called panda bonds, ren­minbi-de­nom­i­nated bonds is­sued by a non-chi­nese en­tity, by rais­ing some 240 mil­lion eu­ros next week, the nation’s fi­nance min­istry said yes­ter­day.

One of the Euro­pean coun­tries most open to Chi­nese in­vest­ment, Por­tu­gal plans to place two bil­lion ren­minbi, or yuan, of three-year bonds, ac­cord­ing to a fi­nance min­istry spokesman.

“The ob­jec­tive of the is­sue is to en­ter a large mar­ket with strong liq­uid­ity,” ju­nior fi­nance minister Ri­cardo Mour­inho Felix was quoted as say­ing on the fi­nan­cial news web­site ECO.

How­ever, the amount of the panda bond is­sue is just a small por­tion of the es­ti­mated 16 bil­lion eu­ros in gov­ern­ment bonds and bills that Por­tu­gal plans to is­sue this year.

Por­tu­gal has been study­ing is­su­ing panda bonds since 2017 but work on the project picked up speed af­ter a visit last De­cem­ber by Chi­nese Pres­i­dent Xi Jin­ping, the news­pa­per Jor­nal de Ne­go­cios re­ported on Wed­nes­day.

Poland be­came first Euro­pean coun­try to is­sue gov­ern­ment bonds on the Chi­nese mar­ket in 2016.Por­tu­gal was forced to seek a 78-bil­lioneuro in­ter­na­tional bailout in 2011 when rates on bond mar­kets be­came too ex­pen­sive for the nation to con­tinue fi­nanc­ing its debt, but it was able to re­turn to debt mar­kets even be­fore the bailout pro­gramme ended in 2014.

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