Alvin Lang
Jul 18, 2024 11:20
The HKSAR Authorities has issued HK$25 billion in inexperienced bonds, attracting international buyers with over HK$120 billion in orders.
The Authorities of the Hong Kong Particular Administrative Area of the Folks’s Republic of China (HKSAR Authorities) has efficiently issued roughly HK$25 billion price of inexperienced bonds, based on the Hong Kong Financial Authority. The bonds are denominated in Renminbi (RMB), US {dollars} (USD), and euro (EUR) underneath the Authorities Sustainable Bond Programme.
Bond Providing Particulars
The inexperienced bonds have been priced on July 17, 2024, following a digital roadshow on July 16, 2024. The tranches have been issued with the next phrases:
- 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 providing drew important curiosity from a various vary of worldwide buyers, with greater than HK$120 billion equal in orders. Notably, the 20-year and 30-year RMB inexperienced bonds have been supplied for the primary time, with the 30-year bond being the longest tenor RMB bond issued by the HKSAR Authorities to this point, setting new benchmarks out there.
Market Impression and Authorities Statements
Monetary Secretary Paul Chan emphasised the significance of this inexperienced bond issuance in selling Hong Kong’s transition to a low-carbon financial system and strengthening its place as a inexperienced finance hub. Chan said, “The issuance of Authorities inexperienced bonds is a crucial initiative to advertise Hong Kong’s low-carbon transformation and consolidate Hong Kong’s growth as a inexperienced and sustainable finance hub. International institutional buyers responded enthusiastically to the subscription of those Inexperienced Bonds, reaffirming our efforts on this entrance.”
The brand new bonds are anticipated to be settled on July 24, 2024, and might be listed on each the Hong Kong Inventory Change and the London Inventory Change. The inexperienced bonds have been assigned credit score rankings of AA+ by S&P International Rankings and AA- by Fitch.
Use of Proceeds and Framework
The proceeds from the inexperienced bonds might be allotted to the Capital Works Reserve Fund, which funds or refinances initiatives that present environmental advantages and help sustainable growth. The HKSAR Authorities’s Inexperienced Bond Framework, initially printed in March 2019 and up to date in February 2022, outlines using proceeds to fund initiatives that facilitate a low-carbon financial system. The framework aligns with worldwide requirements and has acquired a Second Celebration Opinion from Vigeo Eiris, a part of Moody’s ESG Options.
The Hong Kong Financial Authority acted because the HKSAR Authorities’s consultant on this providing. The record of Joint International Coordinators, Joint Bookrunners, Joint Lead Managers, and Joint Inexperienced Structuring Banks is obtainable within the Annex.
Investor Distribution
The distribution of buyers by class is as follows:
| Class | RMB Inexperienced Bonds | USD Inexperienced Bonds | EUR Inexperienced Bonds |
|---|---|---|---|
| Banks | 71% | 57% | 48% |
| Central banks, sovereign wealth funds, and worldwide organisations | 13% | 22% | 14% |
| Fund managers, personal banks, insurance coverage corporations, and others | 16% | 21% | 38% |
The RMB and EUR inexperienced bonds have been supplied in Reg S format, whereas the USD inexperienced bonds have been supplied in 144A/Reg S format.
Picture supply: Shutterstock
