The challenge

International corporates are increasingly developing significant economic ties to China, both as a consumer market and a manufacturing centre. Consequently, the Chinese bond market may present ideal financing opportunities for those with a significant presence in the Far-East – the second world economy is also the third largest world bond market. However, the moving regulatory framework that governs the issuance of so called 'Panda bonds', a bond denominated in Chinese renminbi, issued by a non-Chinese company in China, has previously deterred foreign issuers from tapping this pool of funding.

Air Liquide, the world leader in gases, technologies and services for industry and health, entered the Chinese market over a century ago and now operates in nearly 90 plants with more than 4,000 employees nationwide. Hoping to diversify its funding sources in a geography where it has a significant business presence, Air Liquide sought financial advisors to help navigate this relatively unknown landscape.

The regulatory environment meant that Air Liquide required stable partners with a strong presence in the local market and the logistical capabilities to coordinate its maiden Panda issuance. It found one such partner in MUFG, one of its relationship banks for over a decade.

MUFG advised Air Liquide at every step of the preparation and issuance process, helping coordinate the various banks and lawyer firms on the transaction, tracking progress and outstanding tasks by managing the calendar as well as accompanying the company through its very first credit roadshow in mainland China.


Utilising its global network and major presence in China, MUFG facilitated the inaugural issuance of dual-tranche 3-year and 5-year notes in the China Interbank Bond Market.

Pursuing a private placement as opposed to a public offering helped to contain the number of regulatory hurdles that have previously proved to be too great a resource burden for many organisations. Likewise, the deal team focused their attention on a limited number of Chinese institutional investors who were already registered with the regulator.

The deal not only required an expert understanding of the intricacies of the local market, but also necessitated logistic and linguistic support to uphold expected levels of transparency with both the regulator and Air Liquide's management team in France.


The deal marked several firsts in the international bond markets. The 5-year tranche is the longest maturity ever achieved by an international Panda issuer. This transaction is also the first ever Panda issuance to use a guaranteed structure. The latter milestone is particularly significant in setting new standards for the Panda market. Air Liquide is charting a path that others will inevitably follow.

More importantly, the transaction opened up a traditionally underutilised source of financing while reinforcing Air Liquide's commitment to developing and expanding its presence in a key market.

As China cements its position as a dominant world superpower, it goes without saying that Chinese regulators will look to increase the appeal of its domestic bond market for international corporates. The bond rush is undoubtedly heading East.