A government-backed real estate company in central China's Hubei Province has raised 1 billion yuan through private placement in China's interbank bond market to fund the city's affordable housing program, the company said on Thursday.

Chinese brokerage Guotai Junan and CITIC Securities were chosen as underwriters for the five-year bond with an annual interest rate of 6.38 percent.

Yichang Fangtou, the property arm of Yichang Urban Construction Investment Holding Group in Yichang City, said its affordable housing program had been stalled by funding difficulties.

Given weak demand for its exports and a domestic manufacturing sector saddled with overcapacity, China has been looking to boost infrastructure building to shore up growth, which moderated to 7 percent during the first half this year, down from 7.4 percent for 2014.

Local governments now face greater constraints in funding as China seeks to gradually phase out local government financing vehicles -- companies that have been raising funds on their behalf.

To meet the shortfall, the central bank has pumped cheap, long-term funding through policy banks to support projects such as renovations, and the country's top economic planner has also eased access to funding in the bond market.

China International Capital Corporation said in a research note on Thursday that policy lenders are likely to issue 300 billion yuan of bonds as part of a 1 trillion infrastructure funding widely reported by media recently.

The 300 billion issue, CICC says, has the potential to leverage three times as much in investment into infrastructure programs, an equivalent of up to 1.3 percent of China's GDP growth this year.