Primer

Panda bonds

Sunday, October 2, 2005

· In finance, a popular name for debt instruments issued by international lending institutions in local Chinese currency.

· Bonds that the Asian Development Bank and an arm of the World Bank intend to issue under a pilot program authorized last week by the Chinese government.

· Next-generation cousin of "samurai bonds" issued decades ago in Japan.

· A tool for developing a modern bond market in China as an alternative source of financing from Chinese banks, which last quarter provided 99 percent of corporate financing.

· Bonds that carry no credit risk and, like Treasury bonds in the United States, will set a benchmark for gauging the risk of other corporate and municipal borrowers.

· Another small step by China away from strict currency controls to full convertibility of the yuan.

· Eventually, a vehicle for foreigners to invest in China while betting on the continued appreciation of its currency.

-- S.P.


© 2005 The Washington Post Company