SHANGHAI, Nov 25 (Reuters) - Guotai Junan Securities became the first Chinese securities firm to issue a so-called Yulan bond, an asset class designed to link Chinese issuers with global investors, the Brussels-based securities depository Euroclear said on Wednesday.

Guotai Junan Securities’ issuance of $300 million in three-year Yulan bonds was four times oversubscribed, Euroclear said in a statement.

Yulan bonds are issued through Shanghai Clearing House, which serves the Chinese interbank bond market. But international investors settle the securities within Euroclear’s network, and thus do not need to understand the Chinese settlement system.

"The successful issuance of Yulan Bond ... (symbolises) the entry into a new stage by Chinese institutions for overseas bond issuance activities,” said Nie Xiaogang, Deputy General Manager at Guotai Junan Securities.

The issuance comes after Bank of China issued the first 'Yulan' bond in February. And the asset class was announced by Euroclear and Shanghai Clearing House, named after Shanghai’s city flower, the magnolia, in late 2020.

The bonds were set at 1.619%, 40 basis points lower than the original guidance rate, according to Shanghai Clearing House.

"We look forward to 2022 where we see a healthy pipeline of issuances from all private sectors continuing the momentum of this new and innovative structure," said Stephan Pouyat, Global Head of Capital Markets and Funds Services at Euroclear.

The issuance comes against a backdrop of rising defaults on bonds issued by Chinese property developers, as China pushed to deleverage its debt-laden real estate sector amid a slowing economy. (Reporting by Jason Xue and Andrew Galbraith Editing by Mark Potter)