A major Russian industrial company successfully placed its first tranche of so-called "Panda Bonds" on the Shanghai Stock Exchange in March, and there’s talk that a second tranche may be in the works. The ‘Panda Bonds’ are a way for companies to raise capital in China. They are also a sign of growing financial ties following Russia's participation in the China-proposed "One Belt, One Road" Initiative.

Constrained by the combination of Western sanctions and low energy prices, Russia’s economy is back into growth mode, but at a slow pace. Some of Russia's industrial heavyweights are looking East for growth capital. 

Aluminum producer UC Rusal, with shares traded in Paris, Hong Kong and Moscow has become the first company with no operational assets in China to successfully issue Renminbi-denominated corporate bonds, dubbed “panda bonds” on the Shanghai Stock Exchange. 

“We initially targeted to raise 500 million yuan (72.5 million US dollars), it ended up with 1 billion yuan (140 million US dollars) –  it’s an over subscription, so there’s been good demand and interest from investors,” said Elena Ivanova, the corporate finance director at UC Rusal. 

Meanwhile, financial experts say diversifying lenders in Asia presents an opportunity for Russian businesses. 

“The use of panda bonds and a greater presence in China’s financial markets may be a step toward a greater presence in other segments of Asian financial markets - something that is very much lacking so far,” addressed Yaroslav Lissovollik, the chief economist at the Eurasian Development Bank. 

Industry experts say with the door opened by Rusal, more companies, in Russia and beyond, will attempt to follow its path in coming years.