UBS Group AG’s debut Chinese domestic bond sale underscores the market’s growing popularity among international issuers seeking lower borrowing costs. The Swiss bank raised 2 billion yuan ($297.5 million) of so-called panda bonds at a coupon of 1.78%. This is the lowest rate and the tightest spread over China’s onshore benchmark on record for a five-year note issued by a foreign financial institution, UBS said in a statement. The offering highlights increasing foreign interest in China’s onshore bond market as a cost-effective funding avenue.

Panda bonds are yuan-denominated notes sold in the onshore market by entities registered outside China. UBS’s successful issuance reflects broader trends of international financial institutions tapping China’s capital markets amid declining global interest rates. The record-low pricing signals strong investor appetite for high-quality foreign debt in the region and may encourage further entries by other global banks. The move also reinforces China’s efforts to deepen its financial markets and attract foreign participation.