Global debt markets signed off on Beijing's latest strategic policy initiative yesterday by backing two groundbreaking bond issues by Mongolia and Bank of China, with proceeds to be used to fund infrastructure and development projects. The two separate deals raised a combined US$3.66 billion. The standout issuance was a US$3.5 billion, four-currency bond from Bank of China; the first of its kind for a deal of such size. The bank's plan is to use proceeds to extend a US$20 billion credit line to Beijing's "One Belt, One Road" plan, an initiative to extend trade and investment ties along the old land and maritime Silk Road routes through Central and Southeast Asia. A 1 billion yuan (HK$1.2 billion) dim sum bond with a 7.5 per cent coupon was issued by Mongolia, which Kathy Liu, head of international debt capital markets at Citic CLSA Securities, the lead manager on the deal, described as "the starting point of the One Belt, One Road". It was the first dim sum bond by an Asian sovereign and would help Mongolia diversify its bond investor base before it launches a similar-sized yuan bond later, Liu said. Proceeds will in part be used to fund mining and infrastructure projects, with the issuance heralding a return to the capital markets for the commodity-rich nation following several years of protracted disputes with key international investors. In a separate announcement this week, China Citic Bank said it would finance 200 projects to the tune of more than 400 billion yuan along the old Silk Road routes. The mainland's trade with countries along the routes will surpass US$2.5 trillion within in a decade, President Xi Jinping said in March. The founder of research firm Independent Mongolian Metals & Mining, Dale Choi, said the Mongolian bond would increase national debt but made sense given the economy was picking up. "As long as there is progress on major mining projects investors will believe in the mid- to long-term development on Mongolia," Choi said. Bank of China's US dollar bond included three-, five- and 10-year offerings that will pay coupons of 2.125, 2.875 and 3.875 per cent, respectively. The bond's two-year yuan tranche coupon will pay 3.6 per cent.