The New Development Bank announced its successful issuance of a 8.5-billion-yuan ($1.2 billion) "panda bond" in the China interbank bond market on Monday.

The newly issued three-year bond has surpassed the previous record of 7 billion yuan. NDB has thus established a new benchmark transaction in the China Interbank Bond Market, the bank said.

Panda bonds are yuan-dominated bonds issued by overseas institutions in the Chinese onshore market.

NDB is able to price the bond with a negative issuer premium thanks to strong demand from onshore and offshore investors.

Net proceeds from the sale of the bond will be used to finance infrastructure and sustainable development projects that benefit NDB member countries and contribute to achieving the bank’s sustainable development goals. Up to 100 percent of the net proceeds from the sale of the bond may be remitted offshore in renminbi and/or converted into other currencies. Pending their use, the net proceeds from the sale of the bond will be invested as part of the NDB's liquid assets.

"In order to support our operations, NDB seeks to increase its presence in local capital markets of our member countries by issuing and lending in local currencies, including the China interbank bond market. We remain strongly committed to supporting China’s efforts aimed at deepening its domestic capital market and this panda bond issuance contributes to this effort," said Leslie Maasdorp, NDB's vice-president and chief financial officer.

Bank of China acted as the lead underwriter of the bond. Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank, Ping An Bank, Bank of Ningbo, CITIC Securities and Guotai Junan Securities acted as joint underwriters.

Founded by Brazil, Russia, India, China and South Africa in 2014, the NDB opened in July 2015, with its headquarters located in Shanghai. Dilma Vana Rousseff was elected in late March as the bank's new president for a term lasting through 2025.

Since its establishment, the NDB has approved over $33.2 billion in loans for 98 projects in developing countries. Aside from the five BRICS nations, the bank has added Bangladesh, the United Arab Emirates, Egypt and Uruguay to its list of members in recent years.

The issuance of the new panda bond was announced ahead of NDB's eighth Annual Meeting, which will be held in Shanghai from May 30 to 31.