Hossam Gramon

ADSERO on Egypt’s Historic Panda Bonds Debut in Chinese Market 

ADSERO – Ragy Soliman & Partners served as the Egyptian Local Counsel to the Egyptian Ministry of Finance (MOF) in the issuance of RMB-denominated bonds, commonly known as “Panda Bonds,” in the Chinese market. The issuance, totalling 3.5 billion Renminbi (approximately USD 500 million), marks a historic milestone as Egypt becomes the first in the region to introduce RMB-denominated bonds in the Chinese market. 

The ADSERO team was led by Hossam Gramon (Partner and Head of Banking & Project Finance, pictured) and further included Karima Seyam (Senior Associate), Aya Badr (Associate) and Yosr Allam (Junior Associate). 

Fangda Partners served as the Local Chinese Counsel to the MOF, while Dechert acted as the International Counsel to the MOF. The collaboration between the multilateral development banks and the lead underwriter and bookrunner, Bank of China Limited, supported by HSBC Bank (China) Company Limited, ensured the success of this landmark transaction. 

The Asian Infrastructure Investment Bank (AIIB) and the African Development Bank (AfDB) played a pivotal role by providing guarantees to support the issuance of Egypt’s first Sustainable Panda Bond. Valued at RMB 3.5 billion, this issuance stands out as the first by an African sovereign in the Chinese interbank bond market, showcasing Egypt’s dedication to fostering sustainable development. 

The credit guarantees from these two esteemed multilateral development banks, both boasting triple-A ratings, played a critical role in attracting investors and securing competitive terms for the transaction. 

The proceeds from the bond will be directed towards supporting Egypt’s inclusive growth and green objectives, aligning with its Sovereign Sustainable Financing Framework. Launched ahead of COP27 in 2022, this framework aims to finance Paris Agreement-aligned digital and transportation projects, contributing to the reduction of carbon emissions and enhancing the quality of life for Egyptian citizens. 

Egypt’s issuance of a 3-year Sustainability Panda Bond worth RMB 3.5 billion ($478.7 million) signifies its status as the first African nation to venture into this market, showcasing a commitment to accessing untapped sources of capital for driving economic growth. 

The partial credit guarantees provided by the African Development Bank and the Asian Infrastructure Development Bank not only supported the issuance but also paved the way for other African countries to explore the fast-growing Chinese debt capital markets. Panda bonds, denominated in Chinese yuan, are issued by foreign entities in China’s domestic capital market.