A new channel for mainland investors to purchase overseas bonds opened on Friday, even as uncertainty lingered over the fate of heavily indebted developer China Evergrande Group.

The Southbound Bond Connect is an agreement that permits institutional investors from mainland China to buy bonds in Hong Kong “through connection among the Mainland Financial Infrastructure Services Institutions.” This was announced jointly by the People’s Bank of China, the Hong Kong Monetary Authority and on September 15.

Edmond Lau, HKMA Deputy Chief Executive described this opening as a major breakthrough that completes China’s two-way opening to the bond market via Hong Kong.

Lau said that “I believe the most important benefit would be the fact that it significantly increases the investor base in our Hong Kong bonds market.”

According to Lau, “Mainland investors are very wealthy and have large savings. They also need diversification of their portfolios and so this channel is convenient for them to get into Hong Kong’s offshore bond market.”

Southbound Bond Connect (or “connect”) programs are a variety of programs that connect the Hong Kong markets and mainland. Stock Connect is another similar program that allows mainland investors to trade stocks in Hong Kong and foreign investors access to Shenzhen-listed shares on the mainland.

The launch of the new bond investment channel for mainland investors comes as questions remain over debt-ridden Evergrande’s ability to pay off a massive interest on a dollar-denominated bond that was due Thursday.

Although a company unit had committed to pay the interest on the mainland-traded bonds earlier in the week, Evergrande is still silent about the $83million bond interest payment. There will be more coupons payments over the next few weeks.

Even though no payment was made on Thursday, the company will not technically default unless it fails to make that payment within 30 days.

Lau stated that although we cannot speak on the financial affairs of individuals companies, what Lau can confirm is that Hong Kong’s banking sector has not been exposed to high-leverage realty developers on the mainland.

He stated that Hong Kong can manage any fallout from these businesses.

— CNBC’s Emily Tan contributed to this report.