Brazil to become first Latin American country to issue sovereign panda bonds

Brazil formally kicked off plans to issue its first sovereign panda bonds on Thursday, a landmark move officials said would create new opportunities for bilateral collaboration in financial markets.

As Brazil will become the first Latin American country to issue sovereign panda bonds, analysts said the move has attested to the growing interest of international issuers in panda bonds for diversified and lower-cost funding channels and could pave the way for broader participation by international issuers in China's bond market.

A panda bond is a renminbi-denominated debt instrument issued by overseas governments or institutions in China's onshore capital market. 

The Ministry of Finance of Brazil delivered its letter of intent for issuing panda bonds to the National Association of Financial Market Institutional Investors on Thursday, with officials from China and Brazil attending a ceremony in Beijing marking the move.

Brazil plans to raise up to 5 billion yuan ($735 million) with its inaugural issuance of panda bonds.

Pan Gongsheng, governor of the People's Bank of China, said at the ceremony that PBOC has worked closely with the Brazilian finance ministry and central bank, delivering tangible outcomes in areas such as local currency cooperation, financial infrastructure connectivity and financial market collaboration.

"We stand ready to offer facilitation to the Ministry of Finance of Brazil in issuing panda bonds in China," Pan said, noting that he believes the successful issuance of the bonds would create more opportunities for bilateral financial cooperation.

Pan added that there have been a growing appetite for panda bonds from the private sector and sovereign issuers around the world, and the PBOC welcomes more qualified Brazilian institutions to participate in China's financial markets.

Dario Durigan, Brazil's minister of finance, confirmed to China Daily on the sidelines of the event that the letter of intent delivery on Thursday has made Brazil the first Latin American sovereign issuer formally seeking an issuance of panda bonds.

Addressing the event, Durigan said that, "We are ready to come to China and offer our sovereign bonds from Brazil in the Chinese market, as a sign of confidence and as a sign that we should work together if we want to improve life of our people."

Aiming to issue the panda bonds in the next months, the Brazilian finance ministry is also advancing wider capital market cooperation with China, including a bilateral exchange-traded fund connectivity program and information services for Chinese investors of the Brazilian capital markets, he added.

Brazil's planned offering would follow inaugural sovereign panda bond issuances by Kazakhstan and Pakistan earlier this year, adding further momentum to the internationalization of the RMB bond market. Panda bond issuances reached 132.98 billion yuan in the first five months of 2026, PBOC data showed.

Brazilian companies have already begun tapping China's bond market. In 2024, Brazilian pulp producer Suzano became the first Latin American corporate issuer of panda bonds outside the financial services sector, raising 1.2 billion yuan.

Liu Chunsheng, an associate professor of international economics at the Central University of Finance and Economics, said issuing panda bonds would help Brazil diversify its external financing, lower funding costs and reduce foreign exchange risks by better matching RMB financing with its growing trade and investment links with China.

He said the move could encourage more Latin American sovereigns and companies to tap China's bond market as issuance mechanisms continue to mature, while expanding the RMB's role beyond trade settlement into cross-border financing and investment, supporting its broader international use.