HONG KONG -- China's Ministry of Finance said it set coupon rates of 2.25% to 3.30% for its inaugural six billion yuan ($878.7 million) bond sale in Hong Kong, as part of the nation's efforts to boost the yuan's international position.

The sale of two-year, three-year and five-year bonds, which started Monday, is China's first yuan-denominated sovereign bond issue outside mainland China.

The ministry said earlier the sale will boost Hong Kong's position as a global financial center, promote the use of the yuan in the region, and expand the market for yuan-denominated bonds in Hong Kong.

The two-year bonds, which primarily target retail investors in Hong Kong, will carry a coupon of 2.25%, the ministry said. The three-year bonds, which target both retail and institutional investors, will carry a coupon of 2.70%, it said. The ministry's five-year bonds, which primarily target institutional investors, will carry a coupon of 3.30%.

Subscription started Monday and will end Oct. 20, with subscription results due Oct. 22. The bonds will be issued Oct. 27, and interest is payable semiannually in arrears, the ministry said.

The lead managers and bookrunners of the issuance are BOC Hong Kong Holding Ltd. and Bank of Communications Co. A total of 19 banks in Hong Kong are selling bonds offered in the retail tranche.

Vice Minister of Finance Li Yong said whether the Ministry of Finance will issue more yuan-denominated sovereign bonds in Hong Kong in that future depends on the response for China's inaugural yuan-denominated bond sale in the territory.

Mr. Li said the outlook for more corporate yuan-denominated bond sales in Hong Kong is "very good," adding that he expects more mainland financial institutions to issue bonds in the city in response to rising demand.