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A Panda bond is a Chinese renminbi-denominated bond from a non-Chinese issuer, sold in the People's Republic of China.[1] The first Panda bonds were issued in October 2005 by the International Finance Corporation; they sold 1.13 billion yuan of 10-year bonds at a 3.4% yield.[2] They were followed later in the month by a one billion yuan issue from the Asian Development Bank.[3] The Chinese government had been negotiating for several years about implementation details before permitting the sale of such bonds; they had been concerned about the possible effects on their currency peg. Eventually, it was agreed that funds raised from sales of Panda bonds would have to remain in China; issuers would not be permitted to repatriate such funds.[2]
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