China is mulling plans to allow more foreigners to issue yuan-denominated bonds on the mainland to boost development of the domestic capital markets, the China Daily said on Saturday, citing an unnamed banking official.
Foreign borrowers would need government clearance and a quota allocation before they could issue panda bonds - yuan-denominated bonds issued by foreigners - in China. The official gave no details on the timing of the potential plan.
So far, such issuance has been scanty, partly because Beijing has limited issuers to foreign government-backed organisations and international institutions.
The IFC, the private sector arm of the World Bank, and the Asian Development Bank issued inaugural yuan-denominated bonds in October 2005, with issues of 1.13 billion yuan ($148 million) and 1 billion yuan respectively. The IFC offered a second, 870 million yuan issue of panda bonds in November and lent on the proceeds to four Chinese private companies.
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