Mercedes-Benz will launch a yuan-denominated bond in China, according to media reports, becoming the first nonfinancial foreign enterprise to issue yuan debt on the Chinese interbank market.

"Yuan bond issues by nonfinancial overseas enterprises will lead to a more open Chinese capital market" as more issuers raise money in the mainland, said Lian Ping, chief economist of Bank of Communications Ltd.

The Economic Information Daily reported on Tuesday that Bank of China Ltd will be the principal underwriter. Where Mercedes will use the proceeds hasn't been disclosed, but experts said the money is most likely to be spent on domestic projects.