SHANGHAISINGAPORE, Nov 17 Reuters Global companies are making a beeline for China39;s debt markets, issuing record amounts of yuandenominated bonds and borrowing heavily from mainland banks, capitalising on rockbottom yuan interest rates as funding costs elsewhere jump.

Companies and banks are raising record amounts of cash through yuan bonds issued in mainland China and in Hong Kong, known as panda and dim sum bonds, respectively.

The surge in their borrowing from Chinese banks has catapulted the yuan past the euro into becoming the secondbiggest currency used in global trade finance, providing a fillip to Beijing39;s ambitions to internationalize the yuan.

The global rush to borrow from China is counterintuitive, coming as international investors are shunning the world39;s secondbiggest economy out of concerns about geopolitical tensions and weak growth, says Fiona Lim, senior FX strategist at Maybank.

While the fundamental story is not compelling for Chinese investors looking for growth, the depreciation of the yuan as well as the rate cuts result in a much cheaper cost of borrowing, Lim said.

Foreign companies such as German carmaker BMW and Crédit Agricole S.A as well as overseas units of Chinese firms raised a record 125.5 billion yuan 17.33 billion selling panda bonds during the JanuaryOctober period, a 61 jump from the same period last year.

The National Bank of Canada raised 1 billion yuan from the sale of a threeyear panda bond at a coupon of 3.2 late…