Rusal is moving closer to becoming the first Russian company to issue bonds in China’s mainland debt market, in a move that would deepen financial ties between the two countries.

The aluminium producer has registered a prospectus for a seven year $1.5bn renminbi-denominated bond issuance. A bond sale could follow over the next 12 months.

The deal would mark the first Russian “panda bond”, a term for debt sold by overseas companies and issuers in the Chinese mainland renminbi market.

It would mark a step forward in the process of opening up China’s onshore markets to international borrowers. Over recent years, South Korea, Daimler and HSBC have also issued bonds of this type.

Last April, Alexei Moiseev, Moscow’s deputy finance minister, said that Western sanctions were pushing Russia to explore deeper financial connections with China.

Rusal hinted that it was planning a panda bond late in 2016. Last month, it issued $600bn in dollars, of which 19 per cent was sold to Asian investors. The 5-year bond came with a coupon of 5.125 per cent.

“I am confident that the planned issue of Panda bonds as a risk free instrument will also be very attractive for Chinese investors and will further facilitate Rusal’s longstanding collaboration with its Asian partners,” said Vladislav Soloviev, Rusal’s chief executive, in a statement on Wednesday.

Rusal is already working alongside Chinese companies, and a portion of the panda bond proceeds may be used in China, it said. In 2013, it signed a strategic partnership agreement with Chalco, an aluminium company in China.

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