TIANJIN - The north China city of Tianjin achieved its biggest overseas financing for city construction in the Hong Kong market, suggesting global investors are still interested in Chinese local bonds despite an economic slowdown.

Tianjin Binhai New Area Construction and Investment Group, a financing vehicle of the Tianjin government, [Hong Kong company registration]said on Tuesday that it raised $800 million in the bond market with an interest rate of 3.55 percent.

The borrowing included $300 million in three-year bonds and $500 million in five-year bonds.

It was the largest overseas financing for Tianjin local government financing vehicles (LGFVs), according to Tianjin Binhai New Area Construction and Investment Group.

As China reined in local government debt, LGFVs started to exchange their bank loans for bonds with much lower interest rates and tapped the international market for money.

Nicholas Zhu, a senior analyst at Moody's, said global investors remained interested in LGFV bonds, and a growing number of LGFVs had issued bonds in the overseas market this year.

"The credit of LGFVs is closely related to their governments, so such bonds have become more appealing to international investors in the current credit environment," Zhu said.

Zhu said LGFVs could have lower costs in overseas financing than domestic borrowing.

Tianjin Binhai New Area Construction and Investment Group set up a company in Hong Kong last December to facilitate overseas financing.

The company said it conducted road shows for more than 200 international investors.

The money raised from the bonds will be used to construct Tianjin's Binhai New Area, an important component of an interprovincial program for integrated development between Beijing and nearby Tianjin Municipality and Hebei province.

"Overseas financing gives the company a new platform for more flexible financial operations, and also offers lower borrowing costs and new funding opportunities for the country's major projects," said Li Guangzhao, chairman of Tianjin Binhai New Area Construction and Investment Group.

The company said it plans to widen international financing to supplement domestic borrowing.

Earlier this month, [Hong Kong Company Formation]China opened its interbank bond market to foreign central banks, international financial institutions and sovereign wealth funds, a move Fitch Ratings said would boost demand for Chinese local government bonds.

Liu Linan, a strategist at Deutsche Bank, said foreign investors could hold up to 10 percent of onshore Chinese bonds in the next five years as China continues opening access to its bond market.