Chinese regulators moved on Tuesday to improve the quality of credit ratings for panda bonds – a yuan-denominated asset class that has seen a surge in interest from foreign sovereign and institutional investors this year as a key tool to bolster Beijing’s yuan-internationalisation push.

Credit-rating agencies must adhere to the principles of independence, objectivity and prudence, according to a circular posted to the website of the National Association of Financial Market Institutional Investors. The self-regulatory body, under the central bank, oversees the interbank market, where most panda bonds are traded.

Under the new rules, rating agencies must disclose their rating definitions and provide a mapping of their grades against internationally recognised credit-rating scales.

Rating reports from agencies that fail to publish the required mapping will no longer be accepted for panda bond registration from August 1, the online notice said.

Indonesia is set to become the latest sovereign issuer – following Brazil, Pakistan and Kazakhstan – to tap the market. The Indonesian finance minister, Purbaya Yudhi Sadewa, on Tuesday said Jakarta would issue

US$1 billion worth of panda bonds

on Thursday, marking its debut yuan-denominated bond sale in China.