HONG KONG (

TheStreet

) --

Caterpillar

(CAT) - Get Report

, the biggest builder of construction equipment, plans to issue a 1 billion yuan ($150.5 million) two-year bond issue in Hong Kong, according to multiple reports.

Caterpillar is marketing the yuan bond to institutional investors with an indicative coupon of around 2.25%, a banker familiar with the matter told the

Wall Street Journal

. Caterpillar plans to use the proceeds from the bond to fund its operations in China, another person familiar with the situation told the newspaper.

Caterpillar becomes the second nonfinancial multinational company to tap Hong Kong's growing yuan-denominated bond market, the

Journal

notes.

McDonald's

(MCD) - Get Report

in August raised 200 million yuan in bonds sold in Hong Kong to finance its expansion in China.

Caterpillar hired

Goldman Sachs

to help it sell the yuan-denominated bonds in Hong Kong, the

Journal

and

Bloomberg

report.

Caterpillar has secured approval from Chinese regulators -- including the People's Bank of China and the State Administration of Foreign Exchange -- to transfer the proceeds of the bond sale to the Chinese mainland, people familiar with the matter told the

Financial Times

.

-- Written by Joseph Woelfel

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Joseph Woelfel

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