January 6, 2023
HONG KONG – The Hong Kong Special Administrative Region government said Thursday that it has raised $5.75 billion in dollar, euro and offshore yuan green bonds under its Government Green Bond Programme.
The triple-currency offering is the largest ESG bond issuance in Asia, the HKSAR government said in a statement issued on Thursday night.
There was $3 billion raised in four dollar tranches of 3-, 5- 10- and 30-years and ten billion yuan ($1.45 billion) was raised in two-and five-year tranches, the government said. A further 1.25 billion euro ($1.33 billion) was issued in two- and seven-year tranches.
“We see continued strong demand from global institutional investors for the HKSAR government’s green bonds despite the recent market volatility,” Financial Scretary Paul Chan Mo-po was quoted as saying in the statement.
There was $3 billion raised in four dollar tranches of 3-, 5- 10- and 30-years, the government said. Ten billion yuan ($1.45 billion) was raised in two-and five-year tranches and 1.25 billion euro ($1.33 billion) was issued in two- and seven-year tranches
“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. In fact, we are the first government issuer in Asia to issue green bonds in three currencies concurrently.”
The green bonds were well received by global investors, attracting over $36 billion equivalent in orders, according to the statement.
It added that the offering attracted new investors who had not participated in the HKSAR government’s previous green bond issuances before, with continued participation from a diverse group of conventional and green investors.
“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 products selections, promoting RMB internationalization,” 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 first flagged to investors when the deal was launched on Wednesday.
Euro bonds were priced for the two years at midswaps plus 70 bps and 7 years at midswaps plus 110 bps.
The offshore yuan bonds had a yield of 3 percent for two years and 3.3 percent for five years.