Seven fixed-rate yuan bond sales totalling about 22 billion yuan have been sold by mainland lenders in Hong Kong since June 2007. The banks include China Development Bank and Bank of China.

HSBC Asia-Pacific chairman Vincent Cheng Hoi-chuen said HSBC China had no funding needs, but it hoped the sale could help support Hong Kong's plans to deepen its yuan bond market and strengthen its status as an international financial centre.

'We also want to establish a reference pricing benchmark for retail investors,' Mr Cheng said. 'We are actively planning to issue yuan bonds to retail investors.'

He declined to say whether the absence of a retail tranche was a result of the slow vetting process at the Securities and Futures Commission. Selling the bonds to institutional investors was simpler for this issue, he said.

Market sources have said HSBC had obtained a 3 billion yuan quota for the sale of yuan bonds from the People's Bank of China.

A banker said the bonds sold by HSBC were attractive even though the interest rate was lower than those of previous bonds issued by mainland lenders. 'Still, it is much higher than the less than 1 per cent interest rate from yuan deposits placed at the settlement bank,' the banker said.

Mr Cheng said the interest rate of HSBC's yuan bonds reflected the credit rating of the bank.

Meanwhile, Bank of East Asia (China) also planned a sale of at least 1 billion yuan, sources said. The bonds would carry a two-year maturity with a coupon rate of 2.8 per cent.