Hong Kong Successfully Issues HK$25 Billion in Green Bonds

The
Government
of
the
Hong
Kong
Special
Administrative
Region
of
the
People’s
Republic
of
China
(HKSAR
Government)
has
successfully
issued
approximately
HK$25
billion
worth
of
green
bonds,
according
to
the

Hong
Kong
Monetary
Authority.
The
bonds
are
denominated
in
Renminbi
(RMB),
US
dollars
(USD),
and
euro
(EUR)
under
the
Government
Sustainable
Bond
Programme.

Bond
Offering
Details

The
green
bonds
were
priced
on
July
17,
2024,
following
a
virtual
roadshow
on
July
16,
2024.
The
tranches
were
issued
with
the
following
terms:

• RMB
  2
  billion
  2-year
  tranche
  at
  2.60%;
• RMB
  2
  billion
  5-year
  tranche
  at
  2.70%;
• RMB
  2
  billion
  10-year
  tranche
  at
  2.80%;
• RMB
  2
  billion
  20-year
  tranche
  at
  3.05%;
• RMB
  2
  billion
  30-year
  tranche
  at
  3.15%;
• US$1
  billion
  3-year
  tranche
  at
  4.336%;
  and
• EUR
  750
  million
  7-year
  tranche
  at
  3.379%.

The
offering
drew
significant
interest
from
a
diverse
range
of
global
investors,
with
more
than
HK$120
billion
equivalent
in
orders.
Notably,
the
20-year
and
30-year
RMB
green
bonds
were
offered
for
the
first
time,
with
the
30-year
bond
being
the
longest
tenor
RMB
bond
issued
by
the
HKSAR
Government
to
date,
setting
new
benchmarks
in
the
market.

Market
Impact
and
Government
Statements

Financial
Secretary
Paul
Chan
emphasized
the
importance
of
this
green
bond
issuance
in
promoting
Hong
Kong’s
transition
to
a
low-carbon
economy
and
strengthening
its
position
as
a
green
finance
hub.
Chan
stated,
“The
issuance
of
Government
green
bonds
is
an
important
initiative
to
promote
Hong
Kong’s
low-carbon
transformation
and
consolidate
Hong
Kong’s
development
as
a
green
and
sustainable
finance
hub.
Global
institutional
investors
responded
enthusiastically
to
the
subscription
of
these
Green
Bonds,
reaffirming
our
efforts
on
this
front.”

The
new
bonds
are
expected
to
be
settled
on
July
24,
2024,
and
will
be
listed
on
both
the
Hong
Kong
Stock
Exchange
and
the
London
Stock
Exchange.
The
green
bonds
have
been
assigned
credit
ratings
of
AA+
by
S&P
Global
Ratings
and
AA-
by
Fitch.

Use
of
Proceeds
and
Framework

The
proceeds
from
the
green
bonds
will
be
allocated
to
the
Capital
Works
Reserve
Fund,
which
finances
or
refinances
projects
that
provide
environmental
benefits
and
support
sustainable
development.
The
HKSAR
Government’s
Green
Bond
Framework,
initially
published
in
March
2019
and
updated
in
February
2022,
outlines
the
use
of
proceeds
to
fund
projects
that
facilitate
a
low-carbon
economy.
The
framework
aligns
with
international
standards
and
has
received
a
Second
Party
Opinion
from
Vigeo
Eiris,
part
of
Moody’s
ESG
Solutions.

The
Hong
Kong
Monetary
Authority
acted
as
the
HKSAR
Government’s
representative
in
this
offering.
The
list
of
Joint
Global
Coordinators,
Joint
Bookrunners,
Joint
Lead
Managers,
and
Joint
Green
Structuring
Banks
is
available
in
the

Annex.

Investor
Distribution

The
distribution
of
investors
by
category
is
as
follows:

The
RMB
and
EUR
green
bonds
were
offered
in
Reg
S
format,
while
the
USD
green
bonds
were
offered
in
144A/Reg
S
format.

Image
source:
Shutterstock