Standard Chartered Bank launched the first multinational yuan bond in the city for McDonald's Corp, while Hang Seng Bank became the first lender to allow corporate clients to pay salaries in yuan through it.
The latest developments in the city's yuan services come after several major initiatives to relax controls on the currency as the mainland tries to turn the yuan into an international currency.
McDonald's Corp, through Standard Chartered Bank (Hong Kong), became the first multinational corporation to issue a yuan bond, with a 200 million yuan (HK$228.86 million), three-year note at a 3 per cent interest rate. The offer, sold only to institutional clients including fund companies and private banks, was sold out within hours and was oversubscribed by several times.
Sundeep Bhandari, Standard Chartered's regional head of global markets for Northeast Asia, said McDonald's Corp plans to use the yuan funds to finance its mainland expansion.
Standard Chartered helped negotiate to get regulatory approval to transfer the funds raised to the mainland. China still has capital controls, so all yuan fund transfers in and out of the country need approval by the State Administration of Foreign Exchange.
'The McDonald's Corp's yuan bond has been very popular with investors because it was offered by a big international brand and is the first yuan bond offer by a multinational,' Bhandari said.
McDonald's wants to expand its franchises on the mainland and double its China network to more than 2,000 outlets by 2013.
