Volvo AB, the world's second-largest truck maker, sold its first yuan-denominated notes in Hong Kong and Caterpillar Inc returned to the market after Dim Sum yields fell to an almost eight-month low amid strong investor appetite.

Volvo offered 1 billion yuan ($160.25 million) of three-year securities at 3.8 percent, 1.69 percentage points less than it agreed to pay for similar-maturity debt sold by its unit in the Chinese mainland last month.

Dim Sum yields have decreased 34 basis points this half and dropped to 4.75 percent on Nov 5, the lowest since March, according to Bank of America Merrill Lynch indexes.

Investor appetite for the securities is reviving after the yuan climbed to a 19-year high and the Chinese Communist Party's new leader Xi Jinping pledged to "carry out reform and opening up" of an economy recovering from its slowest growth in three years. International issuers are restarting yuan debt sales after their offerings slumped 71 percent last month.

"The currency has played a very important role in the past few months in boosting confidence in the whole space," Crystal Zhao, a fixed income analyst at HSBC Holdings Plc, said in a telephone interview on Thursday. "We need to look at the international trade volume in renminbi. If that picks up then we'll likely see more deposits and that will bring out liquidity and increase investors' interest."

"International issuers tap this market for two reasons," according to Angus Hui, a fixed-income fund manager at Schroder Investment Management Ltd. "In some cases, they have significant operations on mainland and issue bonds to meet their funding requirements. Others borrow renminbi to diversify their funding sources and they swap their proceeds to other currencies."

Volvo's sale follows Renault SA's 500 million yuan offering last week. That issue shaved almost 63 basis points off the Boulogne-Billancourt, France-based automaker's cost of funding, adding to a 750 million yuan offering of 2014 notes that was priced to yield 5.625 percent in September.

Indian lender ICICI Bank Ltd also saved money when it raised more from its September issue, pricing the extra debt to yield 24 basis points less than the original notes, the data show.

"Now is the best time to issue," said Jeffrey Yap, the Hong Kong-based head of Asia fixed-income trading at Mizuho Securities Asia Ltd. "ICICI saved about 50 to 100 basis points by selling in the Dim Sum market rather than the US dollar bond market and Renault and Volvo are also getting cheaper funding."