China has attracted strong investor interest in its first yuan-denominated green sovereign bond issuance in Canada, with subscriptions reportedly exceeding the amount offered by 13.7 times.

The Ministry of Finance issued bonds worth 4 billion yuan, equivalent to approximately $600 million, as part of efforts to expand the international presence of China’s currency and strengthen green finance cooperation.

The issuance was divided equally between three-year and five-year bonds. The three-year securities carried a yield of 1.4 per cent, while the five-year bonds offered a yield of 1.5 per cent.

Royal Bank of Canada participated as a joint bookrunner for the transaction.

The successful subscription demonstrates investor interest in yuan-denominated financial products and China’s efforts to broaden the range of international markets in which its sovereign debt is traded.

Canada joins financial centres including Hong Kong, London and Macau in the list of markets where China has issued green debt outside the mainland.

Green bonds are designed to raise financing for projects with environmental benefits, including renewable energy, pollution reduction, energy efficiency and other sustainability-related investments.

The transaction also has wider implications for China’s financial diplomacy. By issuing yuan-denominated bonds in overseas markets, Beijing can encourage international investors and institutions to hold and transact in its currency.

However, the longer-term impact will depend on the development of the international yuan market, investor confidence and the availability of liquid financial instruments.