* McDonald's plans to double its outlets in China to 2,000
HONG KONG, Aug 19 - U.S. fast food group McDonald's Corp sold $29.5 million of yuan bonds in Hong Kong on Thursday, becoming the first foreign corporate to raise such debt after China tweaked rules to internationalise its currency.
McDonald's, whose Golden Arches emblem is identified as an American cultural symbol, plans to double its China network to more than 2,000 outlets by 2013. These funds will finance working capital needs in what is its fastest growing market.
The bond sale comes a month after rules were changed in Hong Kong to allow the sale of yuan-denominated products, a landmark move towards an international role for the yuan or the renminbi.
"An icon of American capitalism like McDonald's tapping into that market shows a sign of confidence in the yuan markets," said Delphine Arrighi, senior rates strategist with Standard Chartered Bank.
"This bodes well for the internationalisation of the yuan and in the longer term (for it) as a reserve currency. It ties up well with the recent measures taken by the PBOC (People's Bank of China) allowing a greater usage of the yuan," said Arrighi.
The bonds, sold at a coupon of 3 percent offer a spread of about 150 basis points over Chinese government bonds, are the latest in a slew of yuan products that hit the market after the July 19 announcement.
The scheme allows the sale of more yuan-denominated financial products and permits the opening of yuan accounts potentially unlocking a huge new market for currency transactions. For a PDF of Reuters stories on the issue, click the link: http://r.reuters.com/zuk63n
Just under 40 billion yuan ($5.89 billion) worth of yuan-denominated bonds have been issued in Hong Kong so far, most of it issued by government-backed banks such as China Development Bank, the Export-Import Bank of China, and by China's Ministry of Finance.
McDonald's, which has localised its menu to include food catering to the Chinese palate like taro pies, has opened more than 1,100 outlets in mainland China since entering the market in 1990 and it plans to launch another 150 to 175 this year. (Additional reporting by Saikat Chatterjee; Editing by Sharon Lindores)