The Chinese Ministry of Finance issued 12 billion yuan ($1.67 billion) of treasury bonds in the Hong Kong Special Administrative Region (HKSAR) on Wednesday, the latest effort to attract foreign investment and promote the internationalization of the yuan.
 
The first round of T-bonds totaling 12 billion yuan was issued through a tender, comprising tranches of 6 billion yuan of two-year notes, 4 billion yuan of three-year notes and 2 billion yuan of 10-year bonds, according to the Ministry of Finance.

The two-year tranche had a subscription multiple of 3.62 times and an issue rate of 2.20 percent; the three-year tranche had a subscription multiple of 4.52 times and an issue rate of 2.30 percent, and the 10-year tranche had a subscription multiple of 5.11 times and an issue rate of 2.71 percent, according to a notice issued by the Ministry of Finance on Wednesday.
 
The Ministry of Finance will issue a total of 30 billion yuan of T-bonds in Hong Kong this year in batches. The first batch, which was sold on Wednesday, was 12 billion yuan. This will be followed by three batches of 6 billion yuan each.

Since 2009, the Ministry of Finance has issued 15 batches of T-bonds in the HKSAR.

HKSAR Financial Secretary Paul Chan said the move demonstrates the sustained support of the central government for Hong Kong's status as an international financial center and the premium offshore yuan trading hub.
 
"It is conducive to promoting the development of the Hong Kong bond market and attracting more international capital," Chan said.

Over the past decade, the issuance scale of yuan T-bonds in Hong Kong has increased from an  initial 6 billion yuan to 30 billion yuan this year, and the maturities range from a single five-year period to two, three and 10 years.

The issuance of offshore yuan T-bonds can lead to an increase in foreign investment and consolidate Hong Kong's position as a global financial hub and its importance in the global financial market, Dong Dengxin, director of the Finance and Securities Institute of the Wuhan University of Science and Technology, told the Global Times on Wednesday.
 
Foreign direct investment in the Chinese mainland in actual use expanded 2.2 percent year-on-year to 499.46 billion yuan in the first four months of the year, according to the Ministry of Commerce.

The T-bond issues are also deemed conducive to boosting the internationalization of the yuan, Dong said.

Deputy Chief Executive of the Hong Kong Monetary Authority Howard Lee said in an interview with CCTV that many countries now hope to designate the yuan as a settlement currency for trade.