Portugal to issue 'panda bonds' in eurozone first

Portugal plans to place two billion renminbi, or yuan, of three-year bonds

Portugal plans to become the first eurozone nation to issue so-called panda bonds, renminbi-denominatedbonds issued by a non-Chinese entity, by raising some 240 million euros next week, the nation's finance ministry said Wednesday.

One of the European countries most open to Chinese investment, Portugal plans to place two billion renminbi, or yuan, of three-year bonds, according to a finance ministry spokesman.

"The objective of the issue is to enter a large market with strong liquidity," junior finance minister Ricardo Mourinho Felix was quoted as saying on the financial news website ECO.

However the amount of the panda bond issue is just a small portion of the estimated 16 billion euros in government bonds and bills that Portugal plans to issue this year.

Portugal has been studying issuing panda bonds since 2017 but work on the project picked up speed after a visit last December by Chinese President Xi Jinping, the newspaper Jornal de Negocios reported on Wednesday.

Poland became first European country to issue government bonds on the Chinese market in 2016.

Portugal was forced to seek a 78-billion-euro international bailout in 2011 when rates on bond markets became too expensive for the nation to continue financing its debt, but it was able to return to debt markets even before the bailout programme ended in 2014.