Pakistan’s top credit rating agency has agreed to work with a Chinese ratings firm on new ways for Pakistani borrowers to raise money in China. The Pakistan Credit Rating Agency Limited (PACRA) and Lianhe Ratings Global Limited (Lianhe Global) signed a Memorandum of Understanding (MoU) on September 1, 2026, in a joint announcement from Lahore and Hong Kong.
The deal covers three areas: sustainable finance, Panda Bonds, and credit research. It marks an early step toward cooperation, not a finished business deal.
What Are Panda Bonds, and Why Do They Matter for Pakistan?
A Panda Bond is a bond sold by a foreign government or company inside China’s own market, priced in Chinese yuan. China runs the world’s second-largest bond market. For a country like Pakistan, it offers a funding option beyond the usual US dollar or euro bond markets.
Pakistan already tested this route once. In May 2026, the government sold its first-ever sovereign Panda Bond, raising RMB 1.75 billion, close to $250 million. The bond carried a 2.5% coupon, came with backing from the Asian Development Bank and the Asian Infrastructure Investment Bank, and was oversubscribed by more than five times. That debut sale was the first tranche of a wider plan to raise up to $1 billion, or RMB 7.2 billion, this way.
What PACRA and Lianhe Global Have Agreed to Explore
According to the joint press release, the two sides plan to look into:
- ESG-related rating products, assessments, and rating methods
- Independent evaluations of green, social, and sustainability-linked bonds
- Joint research and knowledge-sharing on sustainable finance
- Credit rating and research work tied to possible future Panda Bond sales by Pakistani sovereign and corporate issuers
PACRA is Pakistan’s own credit rating agency, giving independent ratings across sectors and financial instruments. Lianhe Global is based in Hong Kong, licensed by Hong Kong’s Securities and Futures Commission, and is the international arm of one of China’s largest rating groups, known for its strong footing in the Panda Bond market.
One detail stands out: this MoU names both sovereign and corporate issuers. May’s bond was raised by the government alone. This agreement leaves room for private Pakistani companies to eventually explore the same market, though no company has been named.
