The Hong Kong Special Administrative Region government announced on the 27th that it has successfully sold green bonds with a total issuance of US$2.5 billion under the government's green bond program.
Hong Kong’s Financial Secretary Chen Maobo said: “The successful green bond offering confirms investors’ confidence in Hong Kong’s long-term credit conditions and economic fundamentals. This transaction can highlight and use Hong Kong’s advantages as a leading green financial hub in the region, and further Promote the development of green and sustainable bond markets."
The green bond issuance has three tranches: a 5-year issuance of US$1 billion, a 10-year issuance of US$1 billion, and a 30-year issuance of US$500 million, establishing a comprehensive benchmark curve for potential issuers in Hong Kong and the region .
Among them is the first 30-year green bond issued by the government in Asia, which is also the longest-term bond issued by the Hong Kong Special Administrative Region government.
In addition, the 5-year yield is 0.635%, the 10-year yield is 1.414%, and the 30-year yield is 2.431%.
Global investors have strong demand for these green bonds. Both the 5-year and 10-year terms have attracted a subscription amount that is five times the issuance amount, while the 30-year period has attracted a subscription amount that is seven times the issuance amount.
This transaction attracts different types of traditional and green investors.
Institutional investors in Asia responded enthusiastically, winning 65% of the total issuance.
This shows that investors in the Asian region have greatly increased their interest in green investment products, and it also highlights Hong Kong's leading role in the development of green finance in the region.
European and American investors were allocated 20% and 15% of the total issuance, respectively. It is worth noting that investors in these two regions have a clear preference for long-term green bonds, with a total of 30-year maturity half Issuance.
Statistic by investor type, 34% is allocated to banks, 46% is allocated to fund managers, private banks and insurance companies, and 20% is allocated to central banks, sovereign funds and international organizations.
The green bonds were issued through the "Global Medium-Term Notes Issuance Program", a specialized agency, and are expected to be settled on February 2, 2021. They will be listed on the Hong Kong Stock Exchange and the London Stock Exchange and have been rated by S&P Global AA+ and Fitch AA-.
The Hong Kong Monetary Authority is the representative of the Hong Kong Special Administrative Region Government for this green bond sale.
The funds raised in the plan will be allocated to the Capital Works Reserve Fund to provide funding for public works projects that have environmental benefits and promote the sustainable development of Hong Kong.
(Headquarters reporter Jin Dong)