The World Bank on January 4 issued its first bond denominated in the yuan, China's currency also known as the renminbi. The 500 million yuan ($76 million) of two-year fixed-rate notes, due on January 14, 2013, offers investors a semi-annual coupon of 0.95 percent.

This is the first renminbi bond issuance in the Hong Kong capital markets in 2011, and the World Bank's first renminbi bond ever.

The transaction comes at a time when China's shareholding in the World Bank is set to increase as part of the realignment of voting shares announced in April 2010. If the realignment is formally approved and subscribed as proposed, China would become the third largest shareholder in the World Bank after the United States and Japan.

The entry of the World Bank into the renminbi bond market in Hong Kong will further deepen the market and permit investors to diversify their currency holdings and expand their renminbi exposure.

Doris Herrera-Pol, Global Head of Capital Markets at the World Bank said, "This is a landmark transaction for the World Bank, and signals its strong interest in supporting the development of the renminbi market."

Anita Fung, Group General Manager and Head of Global Banking and Markets, Asia-Pacific, HSBC, said, "Hong Kong continues to take decisive steps in its development as an offshore renminbi center. Backed by our deep Greater China experience and international connectivity, HSBC is proud to lead the bond issuance and help drive the development of the offshore renminbi market in Hong Kong."