Hong Kong government raises US$3.2 billion via multicurrency green bond

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Hong Kong’s government raised US$3.2 billion via green bonds denominated in US dollars, euros and offshore yuan in the city’s latest push to establish itself as a sustainable finance hub

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Proceeds raised will be used to finance projects that provide environmental benefits and support sustainable development, the HKMA said. Photo: Getty Images

Jiaxing Li

Published: 8:45pm, 18 Jul 2024

Hong Kong’s government raised US$3.2 billion via green bonds denominated in US dollars, euros and offshore yuan in the city’s latest push to establish itself as a sustainable finance hub and to promote the internationalisation of the Chinese currency.

The deal consisted of a US$1 billion three-year dollar bond, a seven-year €750 million (US$819.75 million) bond, and a 10 billion yuan (US$1.38 billion) bond with maturities of two, five, 10, 20 and 30 years, according to the Hong Kong Monetary Authority (HKMA), the government’s representative for the green bond offering.

The three-year US dollar bond was priced to yield 4.336 per cent a year, and the seven-year euro bond was priced to yield 3.379 per cent. The yuan bonds will pay interest rates ranging from 2.6 to 3.15 per cent for tenors between two and 30 years, the HKMA said.

The offering attracted participation from a wide spectrum of investors globally, such as central banks, sovereign wealth funds, private banks, and insurance firms. It drew more than HK$120 billion equivalent in orders, according to a statement from Hong Kong’s facto central bank.

“Global institutional investors responded enthusiastically to the subscription of these green bonds, reaffirming our efforts on this front,” Financial Secretary Paul Chan said in the statement. The issuance is also an important initiative to promote Hong Kong’s low-carbon transformation and consolidate the city’s position as a green and sustainable finance hub, he added.

The debut issuance of 20-year and 30-year green bonds denominated in yuan also marks a “significant milestone” in the city’s sustainable bond programme, according to HSBC, one of the lead managers of the deal.