(Yicai) July 30 -- Morgan Stanley has issued its first so-called panda bonds, making it the first company headquartered in the United States to sell Chinese yuan-denominated notes in China's interbank bond market.

The New York-based global financial services firm sold CNY2 billion (USD278.7 million) of five-year panda bonds with a coupon rate of 1.98 percent on July 24, the China Interbank Market Dealers Association announced on July 28.

The offering attracted strong demand from a range of Chinese investors. It provided high-quality assets to the market and was hailed as a significant step forward in the high-level opening-up of China’s capital market.

The CIMDA said it will continue to implement high-level opening-up policies in the financial sector under the guidance of the country's central bank, further diversifying the types of foreign issuers and contributing to the high-quality development and institutional liberalization of the bond market.

Sales of panda bonds have reached CNY111.2 billion (USD15.5 billion) this year, with foreign governments, international development institutions, and multinational corporations accounting for half of the total, up from less than 25 percent over the entire last year.

Panda bonds have become a key yuan financing channel for international institutions, including the Asian Infrastructure Investment Bank, the New Development Bank, and the Asian Development Bank, as well as the governments of South Korea, Poland, Hungary, and Egypt and companies such as Mercedes-Benz, BMW Group, Volkswagen Group, and BASF.

The AIIB issued CNY2 billion of two-year panda bonds on July 14. The Hungarian government has sold CNY4 billion of three-year notes with a 2.5 percent coupon, the largest single foreign government panda bond, and CNY1 billion of five-year notes paying 2.9 percent, the first five-year foreign government panda bond.

South Korea, Canada's British Columbia, Poland, Egypt, and other countries and regions have also sold panda bonds worth a total of CNY35.5 billion (USD4.9 billion). Overseas financial institutions continue to participate in and enter China's bond market, with the National Bank of Canada, Crédit Agricole, Deutsche Bank, and United Overseas Bank having issued these notes multiple times.

Editor: Martin Kadiev