The Government of the Hong Kong Special Administrative Region of the People’s Republic of China (the HKSAR Government) today (5 January) announced the successful offering of US$5.75 billion worth of green bonds (the Green Bonds), denominated in US dollars (USD), euro (EUR) and Renminbi (RMB), under the Government Green Bond Programme. The triple-currency offering is the largest ESG bond issuance in Asia.
Following a virtual roadshow on 3 January 2023, the Rule 144A / Reg S USD, and Reg S EUR and RMB multi-tranche Green Bonds were priced on 4 January 2023 as follows:
- US$500 million 3-year tranche at 4.494% (35 basis points over 3-year US Treasuries);
- US$1 billion 5-year tranche at 4.585% (70 basis points over 5-year US Treasuries);
- US$1 billion 10-year tranche at 4.672% (95 basis points over 10-year US Treasuries);
- US$500 million 30-year tranche at 5.318% (145 basis points over 30-year US Treasuries);
- EUR750 million 2-year tranche at 3.920% (70 basis points over 2-year EUR mid-swap rate);
- EUR500 million 7-year tranche at 3.964% (110 basis points over 7-year EUR mid-swap rate);
- RMB5 billion 2-year tranche at 3.000%; and
- RMB5 billion 5-year tranche at 3.300%.
The Green Bonds were well received by global investors, attracting over US$36 billion equivalent in orders. 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 Mainland investors through Southbound Trading under Bond Connect, demonstrating Hong Kong’s position as the leading offshore RMB hub. The RMB tranches have also enriched offshore RMB products selections, promoting RMB internationalisation.
The Financial Secretary, Mr Paul Chan, said, “We see continued strong demand from global institutional investors for the HKSAR Government’s green bonds despite the recent market volatility. 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 are being issued under the Global Medium Term Note Programme dedicated to green bond issuances established in early 2021. The Green Bonds are expected to be settled on 11 January 2023 and concurrently listed on 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.
The Hong Kong Monetary Authority acts as the HKSAR Government’s representative in the green bond offerings under the Government Green Bond Programme. Proceeds raised under the Programme will be credited to the Capital Works Reserve Fund to finance or refinance projects that provide environmental benefits and support the sustainable development of Hong Kong.
The HKSAR Government published its Green Bond Framework (the Framework) in March 2019, which sets out how green bond proceeds will be used to fund projects that will improve the environment and facilitate the transition to a low carbon economy. The Framework was subsequently updated in February 2022, reflecting the HKSAR Government’s latest climate commitments and strategy and aligning with the latest international standards and practices in the green bond market. Vigeo Eiris has provided an independent opinion for both the original and updated Green Bond Framework. The Green Bonds have also received the Green Finance Certificate (Pre-issuance Stage) from the Hong Kong Quality Assurance Agency. The HKSAR Government has since published three annual reports on the allocation of the proceeds from previous green bond issuances and the expected environmental benefits of the projects financed.
Crédit Agricole CIB and HSBC acted as Joint Global Coordinators, Joint Lead Managers, Joint Bookrunners and Joint Green Structuring Banks for all tranches. For the USD and EUR tranches, Citigroup and J.P. Morgan acted as Joint Global Coordinators, and together with BNP PARIBAS, BofA Securities, Morgan Stanley and UBS acted as Joint Lead Managers and Joint Bookrunners. For the RMB tranches, Bank of China (Hong Kong) and ICBC (Asia) acted as Joint Global Coordinators, and together with Bank of Communications, Mizuho and Standard Chartered Bank as Joint Lead Managers and Joint Bookrunners.
Hong Kong Monetary Authority
5 January 2023
Investors’ Distribution
|
Category
|
USD Green Bonds
|
EUR Green Bonds
|
RMB Green Bonds
|
|
Banks
|
31%
|
38%
|
84%
|
|
Central banks, sovereign wealth funds and international organisations
|
10%
|
32%
|
5%
|
|
Fund managers, private banks and insurance companies
|
59%
|
30%
|
11%
|
DISCLAIMER:
NOT FOR DISTRIBUTION IN THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA OR JAPAN OR IN ANY OTHER JURISDICTION IN WHICH SUCH DISTRIBUTION OR DISSEMINATION WOULD BE PROHIBITED BY APPLICABLE LAW.
THIS ANNOUNCEMENT IS NOT MADE BEING MADE AVAILABLE IN, AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA OR JAPAN OR IN ANY OTHER JURISDICTION IN WHICH SUCH DISTRIBUTION OR DISSEMINATION WOULD BE PROHIBITED BY APPLICABLE LAW. THIS ANNOUNCEMENT IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT INTENDED, AND SHOULD NOT BE CONSTRUED, AS AN OFFER OF, OR A SOLICITATION OF AN OFFER TO BUY, SECURITIES IN THE UNITED STATES OR ANY OTHER JURISDICTION. THE SECURITIES DESCRIBED HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE LAWS OF ANY STATE OF THE UNITED STATES, AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH ALL APPLICABLE STATE LAWS. THERE WILL BE NO PUBLIC OFFERING OF SUCH SECURITIES IN THE UNITED STATES.
