Hong Kong Raises $5.75 Billion in Asia's Largest ESG Bond Issuance
The Government Green Bond Programme of the Hong Kong Special Administrative Region raised $5.75 billion in green bonds in dollars, euros, and offshore yuan.
The triple-currency offering is the largest ESG bond sale in Asia, according to the HKSAR government.
According to the government, $3 billion was raised in four-dollar tranches of 3, 5, 10, and 30 years, while ten billion yuan ($1.45 billion) was raised in two and five-year tranches. A further 1.25 billion euro ($1.33 billion) was issued in two- and seven-year tranches.
In the statement, Financial Secretary Paul Chan Mo-po was quoted as saying, "Despite recent market volatility, we see strong demand from global institutional investors for the HKSAR government's green bonds."
“Since our issuance in 2021, we have once again launched a triple-currency issuance this year to demonstrate our commitment to promoting the development of green and sustainable finance in Hong Kong and providing the market with useful benchmarks. We are the first government issuer in Asia to issue green bonds in three currencies concurrently.”
According to the statement, global investors liked the green bonds and ordered more than $36 billion worth of them.
It also said that the offering brought in investors who hadn't bought green bonds from the HKSAR government before. Both traditional investors and green investors continued to buy bonds from the offering.
“In particular, the RMB tranches were doubled in size to a total of RMB10 billion to cater for investor demand, and has attracted increased participation of Chinese mainland investors through Southbound Trading under Bond Connect, demonstrating Hong Kong’s position as the leading offshore RMB hub,” the statement reads.
“The RMB tranches have also enriched offshore RMB product selections, promoting RMB internationalisation," it added.
The US dollar 3-year bonds were sold at Treasuries plus 35 basis points (bps), 5 years at plus 70 bps, 10 years at plus 95 bps and 30 years at plus 145 bps. The final price was significantly tighter than what was first flagged to investors when the deal was launched on Wednesday.
Euro bonds were priced for two years at mid-swaps plus 70 bps and 7 years at mid-swaps plus 110 bps.
The offshore yuan bonds had a yield of 3 per cent for two years and 3.3 per cent for five years.
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Source: China Daily