China's finance ministry sold its first offshore renminbi bond Thursday in London, a move by Beijing to boost the international profile of its currency further.

The ¥ 3 billion ($1.3 billion) of yuan-denominated debt maturing in June 2019 will pay an interest rate of 3.28%, according to a deal notice released Thursday by banks handling the sale, and will be listed on the London Stock Exchange.

Investors placed ¥ 8.5 billion of orders for the bonds, according to a person familiar with the deal, with 58% of the securities going to investors from Europe, the Middle East and Africa, and the remainder heading to Asian accounts.

The sale comes amid a broader push from China for the yuan to take on a more significant role in global financial markets as Beijing loosens restrictions on its rigidly controlled exchange-rate and financial system.

Last November, the International Monetary Fund said the yuan would be added to its elite basket of reserve currencies in October 2016 in an acknowledgment of China's growing economic might.

"Making it an investible currency is very important. This bond is part of that process," said Jean-Marc Mercier, global co-head of debt capital markets at HSBC Holdings PLC, which managed the deal along with Bank of China.

"It's very important to list in the U.K. under English law on the London Stock Exchange to make it an internationally investible bond. After this success, maybe they will look to do more in the future," he added.

There have been signs of a pickup in offshore renminbi debt sales. Two of China's largest banks sold local-currency bonds in the U.S. earlier this month.

Last October, China's central bank sold an offshore bond in London for the first time.

The sales have come despite greater investor uncertainty over the future value of the yuan after Beijing weakened the currency last August and then again at the start of 2016. A weaker yuan would likely erode the value of the bonds for foreign-currency investors.

The U.K. government, meanwhile, has looked to promote London as a destination for trading the yuan. In 2014, the U.K. Treasury sold ¥ 3 billion of yuan-denominated bonds as part of a broader strategy to secure London as a Western hub for the Chinese currency.

Write to Christopher Whittall at christopher.whittall@wsj.com

 

(END) Dow Jones Newswires

May 26, 2016 11:45 ET (15:45 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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