Canadian tonnage provider Seaspan Corporation has become the first North American shipping business to issue panda bonds, launching CNY 1.5 billion (US$221 million) of three-year bonds through Bank of China.
The panda bonds, which are denominated in Chinese Yuan (CNY), have an interest rate of 2.5% per annum. Bank of China announced on 22 July that it was the main bookrunner and underwriter. Seaspan, the largest non-operating owner of container ships, is tapping China, the world’s second largest bond market, where interest rates are lower than in Europe and the US.
The successful issuance of this bond marks a significant step for Bank of China in helping Seaspan establish domestic Chinese yuan financing channels, effectively promoting its complete Chinese yuan “borrowing, use, and repayment” loop, and providing a replicable and referable practical model for global shipping companies to conduct direct Chinese yuan financing,” the Bank stated.
British Columbia province was the first Canadian issuer of panda bonds, selling CNY 3 billion of such bonds in January 2016, with Bank of China being among the joint bookrunners and underwriters. Bank of China said that since it underwrote the National Bank of Canada’s CNY 3.5 billion ($ 538.5 million) panda bond issue in November 2016, it has been expanding the overseas panda bond market.
Since 2026, the issuance of Panda bonds has increased significantly, with 103 Panda bonds issued in the interbank market. Bank of China participated in the underwriting of nearly 70 of them, accounting for 65% of the total. CSSC (Hong Kong) Shipping, the leasing arm of China State Shipbuilding Corporation, was the first shipping company to issue panda bonds, issuing CNY 1 billion ($ 145.3 million) of sustainability-linked three-year bonds in March 2023, tied to the proportion of green ship assets in its fleet.
Seaspan is likely to use the proceeds for working capital and finance its newbuilding orders. The company has 56 vessels on order, to be delivered through mid-2029. Last year, the company raised nearly $ 2.8 billion through ‘sale-and-leaseback’ transactions involving 19 vessels. Part of this was already denominated in yuan. (PL)
