Chang Hwa Bank would raise 1 billion yuan or US$163.11 million through a yuan denominated bond sale. The state run bank said that the indicative yield of the bond is between 2.88% to 2.9% by next week. The bond issue was confirmed by three sources with direct information on the transaction.

The bond sale has been approved by the Taiwanese regulatory authorities. This is the latest sign of the growing demand for yuan denominated instruments as the trade ties between China and Taiwan improve.

The volume is at 3 billion yuan set at three years for the bonds that Chang Hwa Bank is planning to sell in the market this year.

Back in September, an agreement was signed between China and Taiwan for the creation of a clearinghouse for yuan denominated transactions in Taiwan. This would be setting the stage for both local and foreign banks to launch yuan denominated bonds in the Taiwanese market.