China Development Bank will sell up to US$656 million in two-year, yuan-denominated bonds in Hong Kong, the first time yuan bonds are sold outside the mainland, the Wall Street Journal reported. The bonds are the latest type of yuan business Hong Kong banks can undertake since some yuan retail-banking services were allowed in 2004 and a second yuan bond in the city could be launched "in the near term," said Hong Kong Monetary Authority Chief Executive Joseph Yam. The bonds will have a coupon of 3% with interest payments made twice a year. The yield on the bonds is similar to that of bonds issued in the mainland. The People's Bank of China opened the door for yuan bonds issued in Hong Kong earlier this month when it said issuers must have a core capital adequacy ratio of at least 4% and have been profitable for three years. The yuan has risen 2.4% since the beginning of the year and analysts anticipate it could rise up to 7.5% for the whole year.