BEIJING/HONG KONG/LONDON (Reuters) - China raised $6 billion in its biggest ever international sovereign bond sale on Tuesday, as it pounced on the year’s sharp dive in borrowing costs.

FILE PHOTO: A U.S. dollar banknote featuring American founding father Benjamin Franklin and a China's yuan banknote featuring late Chinese chairman Mao Zedong are seen among U.S. and Chinese flags in this illustration picture taken May 20, 2019. REUTERS/Jason Lee/Illustration/File Photo

The finance ministry sold the bonds in four tranches. A 3-year issue priced 35 basis points above benchmark U.S. Treasuries, a source at one of the managing banks said. A 5-year bond priced at 40 bps above Treasuries, a 10-year at 50 bps above Treasuries and a 20-year tranche at 70 bps above Treasuries, the source said.

The deal comes after a market rally this year that has driven global bond yields sharply lower, significantly decreasing the cost of financing compared with its previous dollar issuance in October 2018.

The $6 billion total was roughly double the original target and order books -- or demand -- for the bonds had been over $20 billion earlier in the day, according to Refinitiv capital markets news service IFR.

“This has been the largest Reg-S offering by an Asian sovereign issuer to date,” said Sam Fischer, head of China onshore debt capital markets at Deutsche Bank, one of 13 banks mandated to lead the sale.

China’s finance ministry had signaled the move would help it improve its bond yield curve.

It will "provide a pricing benchmark for Chinese enterprises issuing U.S. dollar bonds," Bank of China 601988.SS had said in a statement on its website on Tuesday.

The sale marked only the third dollar bond sale since Beijing revived its international debt issuance program two years ago after a 13-year hiatus.

That comeback deal in 2017 raised $2 billion while a separate transaction in 2018 raised another $3 billion.

Earlier this month China also sold its first euro-denominated bond in 15 years, raising $4.4 billion, and analysts believe European markets will become a greater source of funds for the Asian powerhouse in the future.

All bonds offered buyers between 2 and 3%. U.S. 10-year Treasuries US10YT=RR yielded 1.75% on Tuesday, according to Refinitiv data, nearly 150 basis points below its highs last October when the sovereign issuer last tapped the dollar bond market.

“From a tactical financing standpoint, now is an opportune time to obtain some relatively inexpensive financing,” said Alex Kozhemiakin, head of emerging markets debt at Macquarie Asset Management in New York.