China is slowing making inroads into another major market--debt underwriting.

Caterpillar said its financial services subsidiary raised about $150 million in a yuan (also known as renminbi) denominated medium term note. The issuance was conducted in Hong Kong and bought by institutional investors.

This is just the second non-financial multinational company to tap Hong Kong's yuan-denominated bond market.

Dow Jones points out that several banks have issued bonds denominated in yuan. In August, McDonald's issued yuan-denominated bonds sold in Hong Kong.

Caterpillar, a major maker of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and dieselelectric locomotives, said its two-year paper has a coupon rate of 2 percent. According to the Wall Street Journal, the coupon is the lowest among recent yuan bond issues in Hong Kong.

Proceeds will be used to support Cat Financial, which provides financing for Caterpillar customers in China through its subsidiary, Caterpillar (China) Financial Leasing Co., Ltd.

"This transaction is a result of the progressive partnership approach between the Chinese mainland and Hong Kong in developing financial products to support key Chinese industries," said Kent Adams, Caterpillar vice president with responsibility for Cat Financial. "Our ongoing strategy is to fund our international country operations through the local capital markets wherever possible, and this transaction helps to further expand the diversified global funding platform supporting our international business."

Caterpillar currently has more than 7,400 employees across China.